TMI Blog2021 (11) TMI 732X X X X Extracts X X X X X X X X Extracts X X X X ..... Authority and before this Tribunal and in the submissions filed, the Corporate Debtor is completely silent with respect to this communication having been made to the Appellant herein - the date of knowledge of happening of the default is a relevant date. The part payment made on 31.03.2016 further extends the date of default keeping in view the facts and circumstances of the attendant case on hand. The challenge to the Arbitral Award was dismissed on 06.10.2018. The recovery made in 2016 was provisional, subject to the challenge against the Arbitral Award, which got dismissed on 06.10.2018 and the same was not challenged further. The Application was filed on 04.06.2019 which is within three years of this date. The Hon ble Supreme Court in DENA BANK (NOW BANK OF BARODA) VERSUS C. SHIVAKUMAR REDDY AND ANR. [ 2021 (8) TMI 315 - SUPREME COURT] has noted that once a recovery certificate is issued authorising the Creditor to realise its decretal dues, a fresh right accrues to the Creditor to recover amount of the final Judgement/Order/decree - In the instant case, the challenge to the Arbitral Award was dismissed on 06.10.2018, and hence has attained finality, the part payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 18 of the Limitation Act, 1963, the last noting is dated 02.12.2010. If the limitation is calculated on the basis of the said date, the limitation stopped running on 01.12.2013. Apart from the said office notings no other document has been filed that acknowledges the debt within the period of limitation. The Operational Creditor has further relied on a decree dated 06.10.2018 arising out of the challenge against the Arbitral Award dated 14.02.2008 filed by the Corporate Debtor in the year 2011. The said challenge against the Arbitral Award was filed way beyond the period of limitation and was also dismissed on the very same ground. For the said reason, the challenge against the Arbitral Award cannot be considered to having saved the limitation period for the Financial Creditor. The Honourable NCLAT in para 24 in the matter of Sh. G. Eswara Rao vs. Stressed Assets Stabilisation Fund, [Company Appeal (AT) (Insolvency) No. 1097 of 2019], has held as follows: 24. In the present case, the 'Corporate Debtor' defaulted to pay prior to 2004, due to which O.A. No. 193 of 2004 was filed by Respondent ( Financial Creditor ). A Decree passed by the Debts Recovery Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The decision in this regard was conveyed to the Appellant on 30.04.2008 and the money was paid by cheque dated 10.05.2008. After payment of the Award Money on 10.05.2008 some tentative steps were taken by the officials of the Corporate Debtor reverse and recovery paid money but nothing had happened finally. On 04.12.2012, a proposal was mooted by the Subordinate Authorities of the Corporate Debtor and the same was proposed in the file note sheets, but the Higher Authorities did not agree and referred the matter for examination by the Committee on 11.12.2010. There was no decision taken and the matter remained in the internal files noting only. A Board decision was taken on 11.01.2011 not to make any recoveries and a decision was taken to challenge the Award, though after a delay of three years. The final decision to make recovery was taken only on 29.01.2016 but was never conveyed to the Appellant herein. The Appellant filed an RTI Application and the file notings gave the knowledge about the fact that a Board decision was taken on 29.01.2016 and the amount to be deducted was mentioned as less Arbitration ₹ 11 Crores/-. The total payable sum has been calculated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... served in the Impugned Order dated 18.03.2020 that the Operational Creditor has relied on a decree dated 06.10.2018 arising out of the challenge against the Arbitral Award dated 14.02.2008 filed by the Corporate Debtor in the year 2011 . He placed reliance on the Section 423 of the Companies Act, 1963 which reads as follows:- 433. Limitation. The provisions of the Limitation Act, 1963 (36 of 1963) shall, as far as may be, apply to proceedings or appeals before the Tribunal or the Appellate Tribunal, as the case may be. Learned Sr. Counsel placed reliance on the Judgement of the Hon ble Supreme Court in B.K. Educational Services Pvt. Ltd. Vs. Parag Gupta and Associates , (2019) 11 SCC 633, in which the Hon ble Supreme Court has laid down as follows:- 21...... As in the present case, and as is reflected in the Insolvency Law Committee Report of March, 2018, the legislature did not contemplate enabling a creditor who has allowed the period of limitation to set in to allow such delayed claims through the mechanism of the Code. The Code cannot be triggered in the year 2017 for a debt which was time barred, say, in 1990, as that would lead to the absurd and ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Appellant herein vide cheque dated 10.05.2008 (Annexure A-5). 6. Subsequently Jharkhand Urja Sancharan Nigam Limited ( JUSNL ), the statutory successor of Jharkhand State Electricity Board ( JSEB ), took Board decision on 29.01.2016 to recover the money paid to the Appellant. It is the Appellant s case that this decision was never communicated to them. It is also not the case of the Corporate Debtor that they had communicated this decision to the Appellant herein. The Learned Counsel for the Appellant drew our attention to the transfer scheme. The transfer scheme issued under the Electricity Act, by which JUSNL became the statutory successor of the rights and liabilities of JSEB. Subsequently, the Board took a decision that an amount of ₹ 11 Crores/- is to be deducted and the same was shown under the head keep back Arbitration and an amount of ₹ 2,47,16,999/- was paid to the Appellant vide cheque dated 31.03.2016 after deducting ₹ 11 Crores/-. The Appellant preferred an RTI Application on 02.08.2016 seeking the reasons for the less payment which was received by the Appellant on 06.08.2016. The relevant portion of (Annexure A-6) of the Appeal Paper Book s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead with Article 137 of the Schedule to the Limitation Act, the delay in filing a Petition in the NCLT is condonable under Section 5 of the Limitation Act unlike delay in filing a suit. Furthermore, as observed above Section 14 and 18 of the Limitation Act are also applicable to proceedings under the IBC. 141. Section 18 of the Limitation Act cannot also be construed with pedantic rigidity in relation to proceedings under the IBC. This Court sees no reason why an offer of One Time Settlement of a live claim, made within the period of limitation, should not also be construed as an acknowledgment to attract Section 18 of the Limitation Act. In Gaurav Hargovindbhai Dave (supra) cited by Mr. Shivshankar, this Court had no occasion to consider any proposal for one time settlement. Be that as it may, the Balance Sheets and Financial Statements of the Corporate Debtor for 2016-2017, as observed above, constitute acknowledgement of liability which extended the limitation by three years, apart from the fact that a Certificate of Recovery was issued in favour of the Appellant Bank in May 2017. The NCLT rightly admitted the application by its order dated 21st March, 2019. 142. To s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enge against the Arbitral Award, which got dismissed on 06.10.2018 and the same was not challenged further. The Application was filed on 04.06.2019 which is within three years of this date. 11. The contention of the Learned Sr. Counsel appearing for the Respondents that the Arbitral Award was dated 14.02.2008 and this date was mentioned as a date of default in both the Section 8 Notice as well as in part IV of the Application under Section 9 of the Code, and therefore only that date should be considered as the date of default , is unsustainable, keeping in view that the same Award was challenged and got dismissed on 06.10.2018; that the Award dated 14.02.2008 was also implemented with cheque dated 10.05.2008; a fresh default arose on 31.03.2016, caused by the reversal/deduction from other bills, the knowledge of accrual of the Right to Issue was on 06.08.2016 (when the Appellant received information under RTI); Section 9 Application was filed on 04.06.2019 which is well within the Limitation of three years. 12. The Hon ble Supreme Court in Dena Bank (now Bank of Baroda) (Supra) has noted that once a recovery certificate is issued authorising the Creditor to realise its ..... 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