TMI Blog2021 (9) TMI 930X X X X Extracts X X X X X X X X Extracts X X X X ..... r Section 7 of IBC, the material factor is that the State Bank of India is a Financial Creditor whose debt is outstanding and it was in default on the part of the Corporate Debtor and thus the State Bank of India has a right to move Application under Section 7 of IBC. The personal documents between the parties cannot take away such statutory right of the Bank to initiate proceedings. If the Lead Bank for any reason does not take steps or fails to take steps, the other Banks in the consortium cannot be left high and dry without any remedy, as Limitation Act does not differentiate on such count. It is clear that if that account of the Corporate Debtor with the State Bank of India became NPA on 15.01.2013 there is firstly acknowledgement in Letter dated 21st May, 2015 and then there is another acknowledgment vide letter dated 15.06.2016 as referred above. As such, Section 7 of IBC Application filed on 05th March, 2018 must be said to be within limitation - It is clear from Clause (a) of the Explanation of Section 18 of the Limitation Act that even if an acknowledgment is made to person other than a person entitled to the property or right, still it shall fall in the definition of E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 7 of IBC was filed on 05th March, 2018. The Bank also claimed before the Adjudicating Authority that the balance sheets of the Corporate Debtor showed the overall borrowings and that anything contrary in any instrument would not be applicable in view of the Section 238 of IBC. Thus, the Bank claimed that the debt was within limitation. The Bank relied on letter of authority given by Deputy General Manager to Sri Subratabarman as per the provisions of the State Bank of India Act and that the signatory was authorized to file the Application. 3. The Adjudicating Authority heard the Bank as well as the Corporate Debtor. Corporate Debtor claimed that the Debt was barred by Limitation. It was claimed that the original amounts became NPA on 15.01.2013. Because of the CDR Package time was given to the Corporate Debtor which ultimately failed in August, 2015. The Corporate Debtor claimed the debt to be time-barred. 4. The Adjudicating Authority looked in the record as well as the acknowledgments in the correspondence and came to the conclusion that there was debt outstanding which attracted provisions of Section 7 of IBC; that the Debt was within limitation; and admitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld initiate action and that State Bank of India could not have filed Application under Section 7 of IBC and on the other hand it is claimed that the date of NPA is the trigger point from where limitation starts running. It has been argued that when Corporate Debtor failed to comply with the terms of CDR Package the Corporate Debtor was reverted to state of NPA classified on 27.07.2009 as per RBI Guidelines. The Learned Counsel relied on Letter dated 23rd December, 2016 (Annexure A-22 Page 831) to point out that the Canara Bank had stated that the Corporate Debtor availed facilities as per agreement terms and the Account became irregular and the Loan Account has been classified NPA on 27.07.2009 as per directives of RBI. The Letter stated that in spite of efforts on CDR Package the Corporate Debtor failed and the account reverted to state of NPA as classified on 27.07.2009. The Learned Counsel has argued that Judgments of Hon ble Supreme Court of India show that once time starts running, the Application under Section 7 of IBC needs to be filed within three years as per Article 137 of the Limitation Act. The Learned Counsel referred to the documents and RBI Circulars with regard to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y virtue of any such law. Keeping this provision in view, we refer Section 7 of IBC which provides that Financial Creditor either by itself or jointly with other Financial Creditors or any other person on behalf of Financial Creditor as may be notified by the Central Bank may file an Application for initiating Corporate Insolvency Resolution Process against a Corporate Debtor before the Adjudicating Authority when a default has occurred. Considering this, even if the State Bank of India was part of the consortium or there are documents executed between the parties, or there are circulars of RBI as to how Banks should try to help the defaulting debtors with CDR Packages and how date of NPA should be calculated, still in IBC for Section 7 of IBC, the material factor is that the State Bank of India is a Financial Creditor whose debt is outstanding and it was in default on the part of the Corporate Debtor and thus the State Bank of India has a right to move Application under Section 7 of IBC. The personal documents between the parties cannot take away such statutory right of the Bank to initiate proceedings. If the Lead Bank for any reason does not take steps or fails to take steps, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subject was proposal for resolution of debts and in the proposals, relevant part of Paragraphs 14 needs to be reproduced which reads as under: 14) Based on discussions with them, since it is now proposing to invest substantial amount of money through supply of raw material, the cash flow for which would be rolled over within the overall fund flow which is reflected in the enclosed projections, therefore the company has proposed the following in consultation with M/s. Manjeet Cotton Pvt. Ltd. 173) Position of Debt as on date with all the Lending Banks to be resolved in 10 years. Category Type of loan Can Bk SBI CBI Total Sustainableas per CDR LOA RTL 14.21 11.03 4.30 29.54 Non-Sustainable as per CDR LOA FITL 17.76 15.45 7.75 40.96 WCTL 6.31 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is accompanied by a refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to set-off, or is addressed to a person other than a person entitled to the property or right; (b) the word signed means signed either personally or by an agent duly authorised in this behalf; and (c) an application for the execution of a decree or order shall not be deemed to be an application in respect of any property or right. It is clear from Clause (a) of the Explanation of Section 18 of the Limitation Act that even if an acknowledgment is made to person other than a person entitled to the property or right, still it shall fall in the definition of Explanation below the Section 18 of the Limitation Act. The Learned Counsel for the Appellant referred to the various earlier Judgments of the Hon ble Supreme Court of India. We are not burdening this Judgment with the analysis made by the Ld. Counsel for Appellant of the earlier Judgments. The Hon ble Supreme Court of India itself has referred to its earlier Judgments and legal positions with regard to the applicability of the Limitation Act to provisions of IBC has made quite clear in recent Judgments of Hon bl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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