TMI Blog2021 (7) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... S BISHAL JAISWAL ANR. [ 2021 (4) TMI 753 - SUPREME COURT ]. The Hon ble Supreme Court has dealt with its earlier judgments, and now it is quite clear that Sections 18 19 of the Limitation Act, 1963 and the other provisions of the Limitation Act, as far as may be apply to the proceedings under the I B Code - Thus, Section 18 of the Limitation Act, 1963 applies. The reply filed by the Corporate Debtor which was filed before the Adjudicating Authority clearly shows that the Corporate Debtor had specifically raised issue with regard to limitation and made reference to Section 348A as well as judgments on which the Appellant wants to rely and the issues were specifically raised and the Adjudicating Authority in impugned order considered the issue with regard to limitation and recorded finding as in para 8. Thus, it is not the case where foundation has not been laid. There were pleadings before the Adjudicating Authority. The format has been prescribed by the statute and the Bank had clearly while filing details pointed out even the acknowledgment and had attached the documents. When all this is there, there is no substance in the arguments raised before us that the matter shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank. The Application was thus filed on 11th September, 2019 before the Adjudicating Authority claiming debt due and in default of ₹ 268,37,90,311/-. The date of default was intimated in Form is 15th March, 2016. 3. Before the Adjudicating Authority, the Corporate Debtor put up a defence that under Section 238A of the I B Code read with Article 137 of the Limitation Act, 1963, the period of limitation was three years and the account having been declared NPA on 15th March, 2016, the Application filed in 2019 was time barred. The other reasons were also submitted by the Corporate Debtor for the default mentioning that the cost of the project had increased; that in the Common Loan Agreement, the Bank had to provide ₹ 200 Crores and Bank of India to provide ₹ 116 Crores but the amount disbursed was less and only ₹ 280.94 Crores. The other issues were also raised like interest being usurious. 4. The Adjudicating Authority, after hearing the parties, observed in Para- 8 of the impugned order as under:- 8. Heard the parties and perused the records. The documents are sufficient to ascertain the default on the part of the Corporate Debtor. It is pertinent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t judgments such as in the matter of Sesh Nath Singh Anr. vs. Baidyabati Sheoraphuli Co-Operative Bank Ltd. Anr. - [Civil Appeal No. 9198 of 2019] passed on 22nd March, 2021 and then in Judgement in the matter of Laxmi Pat Surana vs. Union Bank of India Anr. - [Civil Appeal No.2734 of 2020] dated 26th March, 2021 and in Asset Reconstruction Company (India) Ltd. vs. Bishal Jaiswal Anr - [Civil Appeal No. 323 of 2021] (with other Appeals) dated 15th April, 2021. The Hon ble Supreme Court has dealt with its earlier judgments, and now it is quite clear that Sections 18 19 of the Limitation Act, 1963 and the other provisions of the Limitation Act, as far as may be apply to the proceedings under the I B Code . 7. In the matter of Sesh Nath Singh Anr. (supra), the Hon ble Supreme Court mentioned, as under:- 63. Section 5 of the Limitation Act, 1963 does not speak of any application. The Section enables the Court to admit an application or appeal if the applicant or the appellant, as the case may be, satisfies the Court that he had sufficient cause for not making the application and/or preferring the appeal, within the time prescribed. Although, it is the general ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct are applicable to proceedings in the NCLT/NCLAT, to the extent feasible. 68. We see no reason why Section 14 or 18 of the Limitation Act, 1963 should not apply to proceeding under Section 7 or Section 9 of the IBC. Of course, Section 18 of the Limitation Act is not attracted in this case, since the impugned order of the NCLAT does not proceed on the basis of any acknowledgment. 88. An Adjudicating Authority under the IBC is not a substitute forum for a collection of debt in the sense it cannot reopen debts which are barred by law, or debts, recovery whereof have become time barred. The Adjudicating Authority does not resolve disputes, in the manner of suits, arbitrations and similar proceedings. However, the ultimate object of an application under Section 7 or 9 of the IBC is the realization of a debt by invocation of the Insolvency Resolution Process. In any case, since the cause of action for initiation of an application, whether under Section 7 or under Section 9 of the IBC, is default on the part of the Corporate Debtor, and the provisions of the Limitation Act 1963, as far as may be, have been applied to proceedings under the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cept by a process known to law. One question that arises before this Court is whether Section 18 of the Limitation Act, which extends the period of limitation depending upon an acknowledgement of debt made in writing and signed by the corporate debtor, is also applicable under Section 238A, given the expression as far as may be governing the applicability of the Limitation Act to the IBC. 8. The aforesaid question is no longer res integra as two recent judgments of this Court have applied the provisions of Section 14 and Section 18 of the Limitation Act to the IBC .. After observations made as above, the Hon ble Supreme Court referred to the Judgment passed in the matter of Sesh Nath Singh Anr. (supra). 11. Thus, now it is quite clear that Section 18 of the Limitation Act, 1963 applies. 12. Learned Counsel for the Appellant being aware of the fact that the Hon ble Supreme Court has now made the law clear, at the time of arguments, did not try to submit regarding applicability of Section 18 of the Limitation Act, 1963 which was the basis on which the present Appeal was filed. He however, submitted that in the Judgment in the matter of Babulal Vardharji Gurja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor in Civil Appeal No. 3 of 2021 argued that the Appeal should be remanded to NCLAT for decision on the point of limitation. In Para Nos. 2 3, the Hon ble Supreme Court observed as under:- 2. Shri Jayesh Dolia, learned advocate appearing on behalf of the respondents, argued that since service was not effected on the respondents, nobody was present before the NCLT when it passed an ex parte order admitting the Section 7 application. In any event, he argued, that on the facts of this case, time began to run at least in 2002, and an application filed in 2019 obviously cannot be said to be within limitation, as the three-year period under Article 137 of the Limitation Act has long expired. 3. We have already set aside the Full Bench judgment dated 12.03.2020 in Civil Appeal No.323 of 2021. Given the argument of Shri Dolia that service was not properly effected upon the respondents, it would be in the fitness of things to send the matter back to the NCLT for a de novo hearing. Parties are allowed to amend their pleadings, if necessary. The Civil Appeal is allowed in the aforesaid terms. Thus, it is clear that the Hon ble Supreme Court sent back the matter to NCLT for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n be allowed even at this stage, as per the judgments of the Hon ble Supreme Court. The Hon ble Supreme Court directed in Paras 6 and 7 of the Judgment, as under:- 6. There can be no doubt whatsoever that the appellant has been completely remiss and deficient in pleading acknowledgement of liability on the facts of this case. However, given the staggering amount allegedly due from the respondents, we afford one further opportunity to the appellant to amend its pleadings so as to incorporate what is stated in the written submissions filed by it before the NCLAT, subject to costs of ₹ 1,00,000/- to be paid by the appellant to the respondents within a period of four weeks from today. 7. We, therefore, allow the appeal, set aside the judgment of the NCLAT dated 14.10.2020, and restore the appeal to the file to be decided in light of our judgment in Civil Appeal No. 323 of 2021. (C) In the matter of Asset Reconstruction Company (India) Ltd. vs. Bishal Jaiswal Anr , the Hon ble Supreme Court further dealt with Civil Appeal No. 3228 of 2020 where the Learned Senior Advocate appearing for the Respondent argued that no pleading qua acknowledgment of liability was m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant, was not even decided by the Appellate Tribunal; and after referring to the decision in B.K. Educational Services Pvt. Ltd. v. Paras Gupta Associates: AIR 2018 SC 5601, wherein it was held that the Limitation Act is applicable to application filed under Section 7 of the Code, this Court remanded the matter to the Appellate Tribunal for deciding the issue of limitation with respect to the application in question in accordance with law while setting aside the impugned order dated 17.09.2018 and while granting liberty to the parties to submit additional affidavit/s in support of their respective contentions. This Court observed and ordered, inter alia, as under:- Although, we find that the ground articulated in the appeal memo is vague, but, as the objection regarding limitation goes to the root of the matter and touches upon the jurisdiction of the National Company Law Tribunal to proceed with the claim of the respondent; and since the recent decision of this Court in B.K. Educational Services Pvt. Ltd. Vs. Paras Gupta Associates AIR 2018 SC 5601 has held that the question of limitation is applicable even the applications filed under Section 7 of the I. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pleadings can be brought on record or amended even at the NCLAT stage. 18. Law of Pleadings in India by Mogha (18th Edition) shows that the pleadings are statements in writing drawn up and filed by each party to a case, stating what his contentions will be at the trial/ hearing and giving all such details as his opponent needs to know in order to prepare his case in answer. According to learned Author, in pleadings, material facts should be stated in a concise form . The pleadings should be concise as well as precise. Pleadings would include contentions raised in Application, Counter, Appeal, Reply, Rejoinder. 19. Keeping in view the principles with regard to pleadings, it would be necessary to see if in the Application or reply filed, issue with regard to limitation was raised and if the same was considered and discussed along with the documents so as to arrive at a decision. 20. Keeping this in view when we have perused Annexure A-2 (Page 36 of the Appeal) where copy of the form has been submitted by the Bank before Adjudicating Authority, in Part V, Column-5, the Bank had mentioned as under:- 5. THE LATEST AND COMPLETE COPY OF ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Current Maturities of Long Term Debt* 2,54,17,53,662 Interest due but not paid 85,15,72,561 Instalment Due but not paid 66,40,78,936 Total 4,05,74,05,159 Note:*include secured loan of ₹ 61,87,26,361 We hope you will find the above in order. For Amzen Machines Pvt. Ltd. Sd/- Authorizes Signatory 22. The reply filed by the Corporate Debtor (Annexure-3, Page 336) which was filed before the Adjudicating Authority clearly shows that the Corporate Debtor had specifically raised issue with regard to limitation and made reference to Section 348A as well as judgments on which the Appellant wants to rely and the issues were specifically raised and the Adjudicating Authority in impugned order considered the issue with regard to limitation and recorded finding as in para 8 (refers supra). Thus, it is not the case where foundation has not been laid. There were pleadings before the Adjudicating Authority. The format has been prescribed by the statute and the Bank had clearly while filing det ..... 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