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TMI Blog2020 (9) TMI 1219X X X X Extracts X X X X X X X X Extracts X X X X ..... road of a specified section of NH -58 and NH - 72 on Haridwar - Dehradun route, Uttarakhand, on the terms and conditions set out in the Concession Agreement. For the said purposes, the Corporate Debtor availed credit facilities, inter alia, from the Applicant Financial Creditor. That vide Credit Arrangement Letter dated 29.03.2011, the Applicant Financial Creditor sanctioned a rupee term loan facility aggregating to INR 2700 Million with a sub-limit of USD 60 million as an external commercial borrowing ("ECB Facility"), in favour of the Corporate Debtor to part finance the cost of the Project ("DHPL Sanction Letter"). The DHPL Sanction Letter was amended vide an amendatory Credit Arrangement Letter dated 02.12.2011. ii. That pursuant thereto, on 07.06.2011, the Applicant Financial Creditor and the Corporate Debtor executed an ECB facility agreement, wherein the Applicant Financial Creditor undertook to extend a foreign currency \ loan facility up to USD 60 Million ("ECB Facility Agreement") to partly finance implementation of the Project undertaken by the Corporate Debtor. The terms and conditions of the ECB Facility Agreement was modified by way of amendment agreements dated 20. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Corporate Debtor would avail bridge-financing from NHAI to complete the balance work of the Project. NHAI granted approval for one-time fund infusion to the extent of INR 2798.8 subject to signing of a tripartite agreement between the Corporate Debtor, NHAI and Bank of India (as the lead bank of the Senior Lenders) ("Tripartite Agreement"). ix. That on 27.03.2017, due to the default in payment of interest under the DHPL Facilities for the period of September 2016 to February 2017. Applicant Financial Creditor issued a demand notice to the Corporate Debtor demanding payment under the DHPL Facilities. The Financial Creditor directed the Corporate Debtor to pay the total outstanding of INR 187.7 Million. x. That however, despite issuance of the demand notice, the Applicant Financial Creditor did not receive any payment under the DHP-Facilities. xi. That the account of the Corporate Debtor was declared as NP A w.e.f. 31.12.2015. xii. That on 26.04.2018, the Tripartite Agreement as referred to above, was executed, inter alia by the Corporate Debtor and the Bank of India, being the Lead Bank I representative of the Senior Lenders (including ICICI Bank). By virtue of signing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to the Limitation Act, which is applicable to this Application under Section 238A of the Insolvency Bankruptcy Code, 2016. ii. That due to the default in payment of interest under the Dehradun Highways Project Limited Facilities, the Applicant Financial Creditor issued a Demand Notice to the Corporate Debtor demanding payment under the DHPL facilities. In the interregnum, the account of the Corporate Debtor was classified as a Non-Performing Asset with effect from 31.12.2015. The said date is mentioned as the date of NPA by the Applicant/Financial Creditor, whereas the date of default as per the Code would be three months prior to NPA date. iii. That in plethora of judgments, it is time and again emphasized that any time, barred Application is bad in law. It is worthy to note that the same is accentuated in "B.K. Educational Services Private Limited vs. Parag Gupta and Associates in Civil Appeal No. 7286 of 2018 that for filing of the Application, Section 5 of the Limitation Act may be applied to condone the delay in filing such an application. That in consequence of the same, it is intelligible to note that since the Limitation Act is applicable to applications filed under S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings against itself. This shows that the financial condition of the Corporate Debtor has deteriorated and warrants immediate resolution under the aegis of the IBC. In view of the same, since the commencement of CIRP is inevitable and further, since the Corporate Debtor has not denied and hence, admitted its debt towards the Petitioner Bank, the present Company Petition deserves to be admitted. ii. That the date of default for the purpose of a Petition under Section 7 of the IBC is the date of NPA. This has been highlighted by the Hon'ble Supreme Court inter alia in the matter of Gaurav Hargovindbhai Dave vs. Asset Reconstruction Company (India) Limited &Anr. [(2019) 10 SCC 572] and Babulal Vardharji Gurjar vs. Veer Gurjar Aluminum Industries Private Limited & Anr. That in the present matter, the date of NPA is 31.12.2015. It is most relevant to mention that on 18.07.2017 i.e. before the expiry of the limitation period starting 31.12.2015, the Corporate Debtor issued a letter to Bank of India, being the Lead Bank/representative of the Senior Lenders (including ICICI Bank) titled "REVIVAL LETTER/ACKNOWLEDGMENT OF DEBT/SECURITIES" wherein the Corporate Debtor unequivocally a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIRPs. However, the same is not applicable in the present case since as mentioned hereinabove, the Financial Creditor had withdrawn its claim in the CIRP of the Corporate Debtor's alleged parent company. Further, vide the Company Petition itself (Para 20 at Page 7 of Volume I of the Company Petition), the Petitioner Bank brought has it to the notice of this Tribunal that it has withdrawn its claim in the CIRP of the Corporate Debtor's alleged parent company. vii. That in addition to the above, the RP of the Parent Company has emailed to the Petitioner on 19.03.2020, acknowledging the withdrawal of the Petitioner's claim. The RP of the parent company has specifically mentioned that going forward, the Petitioner's claim will not be reflected in the stakeholders. 5. We have gone through the application, reply and rejoinder and the documents filed by both the parties and heard the arguments of both parties and perused written submissions made by both the parties. 6. Ld. Counsel for petitioner submitted that by filing the reply the respondent has not disputed that loan was not disbursed to the respondent and there is default in payment of the debt and he further sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even the Hon'ble NCLAT in the case of Ishrat Ali has also stated the same facts on the point of Section 18 of the Limitation Act, neither in the Babu Lal Case nor in the Ishrat Ali case, there is any document regarding the acknowledgement of debt and therefore, the applicability of Section 18 of the Limitation Act was not considered but herein the case the said document is available, therefore, these decisions are not applicable. He further submitted that even in the case of Jagdish Prasad Sarada v. Allahabad Bank, Company Appeal (AT) No. 183/2020 decided by the Hon'ble NCLAT has not considered the Section 18 of the Limitation Act. 7. He further submitted that so far the contention of respondent that the petitioner had filed a claim before the R.P. in CIRP initiated against the parent company of the Corporate Debtor i.e. EIEL and on the date of filing of this application the claim was pending before the RP, therefore, this application is not maintainable is concerned ,the Ld. Counsel for the petitioner submitted that the said claim was withdrawn by the petitioner and the RP has communicated and at present, there is no such claim pending before the RP. He further submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ada v. Allahabad Bank, Company Appeal (AT) No. 183/2020, the date of declaration of account as NPA in such date of default would not sick. 13. He further submitted that in Form C, he has not mentioned the date of NPA and so the present application is defective. He further submitted that Section 18 of the Limitation Act will not apply in the present case and in this regard, he placed reliance upon the decision of Babulal Vardharji Gurjar vs. Veer Gurjar Aluminium Industries Pvt. Ltd. He further submitted that the private bank is bound by the decision taken by the CoC and the CoC of the EIEL had specifically approved the consortium during the course of the 18th CoC meeting with 66.6 % voting and so in view of the decision of Hon'ble NCLAT Edelweiss Asset Reconstruction Company Limited v. Sai Regency Power Corporation Private Limited & Ors. C.A. (AT)/Ins. No. 887/2020, the applicant is bound by the decision of COC. 14. He further submitted that the RP has not filed the change of the constitution of the CoC and he further submitted that the petitioner is aware with the facts that the respondent has filed an application under Section 10 of the IBC, which is still sub-judice, in wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Effect of acknowledgment in writing-- (1) Where, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed. (2) Where the writing containing the acknowledgment is undated, oral evidence may be given of the time when it was signed; but subject to the provisions of the Indian Evidence Act, 1872 (1 of 1872), oral evidence of its contents shall not be received. Explanation--For the purposes of this section,-- (a) an acknowledgment may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment, delivery, performance or enjoyment has not yet come or is accompanied by a refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to setoff, or is addressed to a person other than a person entitled to the property or right; (b) the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Union Bank of India, Punjab & Sind Bank, Dena Bank, Oriental Bank of Commerce, the Federal Bank Ltd. and the Applicant Financial Creditor ("Senior Lenders"), whereby the Applicant Financial Creditor agreed to extend the DHPL RTL-II Facility to the Corporate Debtor ("Common Loan Agreement II"). If we shall read para 9 along with the letter written by the Corporate Debtor address to the Bank of India enclosed at page 21 of the rejoinder then we are of the considered view that a common loan agreement had arrived with the ICICI Bank, Bank of India and other banks referred in para 9 of this application and this fact has not been denied by the respondent in its reply, therefore, we are of the considered view that although the NPA was declared on 31.12.2015 and according to the date of the NPA, the petitioner was required to file an application under Section 7 of the IBC within the 3 years from the date of default i.e. 31.12.2015 to 30.12.2018 but the present case was filed on 04.03.2020 21. Now, the question is whether the acknowledgement of debt can change the date of default in view of Section 18 of the Limitation Act or nor, as we have already referred Section 18 of the Limitation A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the respondent rather the contention of the respondent is that in view of the decision of Babulal Vardharji Gurjar vs. Veer Gurjar Aluminium Industries Pvt. Ltd. and Jagdish Prasad Sarada v. Allahabad Bank, Section 18 of Limitation Act is not applicable and so the present application is not maintainable. 25. At this juncture, we have gone through the decision of Babulal Vardharji Gurjar vs. Veer Gurjar Aluminium Industries Pvt. Ltd. Civil Appeal No. 6347 of 2019 and we find that in para 33 of the judgment, the Hon'ble Supreme Court held that:- "33. Apart from the above and even if it be assumed that the principles relating to acknowledgement as per Section 18 of the Limitation Act are applicable for extension of time for the purpose of the application under Section 7 of the Code, in our view, neither the said provision and principles come in operation in the present case nor they enure to the benefit of 62 respondent No. 2 for the fundamental reason that in the application made before NCLT, the respondent No. 2 specifically stated the date of default as '8.7.2011 being the date of NPA'. It remains indisputable that neither any other date of default has been state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined. 27. At this juncture, we have gone through the decision of Jagdish Prasad Sarada v. Allahabad Bank, Company Appeal (AT) No. 183/2020 decided by the Hon'ble NCLAT and we find that the facts of this case is different from the facts of case in hand and in that case, some payment was made by the Corporate Debtor and from that day the limitation was decided that is not under Section 18 rather under Section 19 of the Limitation Act, therefore, in that case, in our considered view provision of section 18 of the Limitation Act was not for consideration before the Hon'ble NCLAT, hence, we are of the view that the facts of this case is different from the facts of the case in hand, hence, that will not help the applicant. 28. At this juncture, we would also like to refer the Ishrat Ali Case and in this case, the 5 Member Bench of Hon'ble NCLAT, considered the point of limitation and in para of the judgment Hon'ble NCLAT considered the Section 18 of the Limitation Act and the same is quoted below: - 10. This Appellate Tribunal also considered the same issue in "V Hotels Limited vs. Asset Reconstruction Company (India) Limited - Company Appeal (AT) (Insolvency) No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the prescribed period for filing the suit. In the present case, the account was declared NPA since 1st December, 2008 and therefore, the suit was filed. Thereafter, any document or acknowledgment, even after the completion of the period of limitation i.e. December, 2011 cannot be relied upon. Further, in absence of any record of acknowledgment, the Appellant cannot derive any advantage of Section 18 of the Limitation Act. For the said reason, we hold that the application under Section 7 is barred by limitation, the accounts of the 'Corporate Debtor' having declared NPA on 1st December, 2008. 29. In this decision also, the Hon'ble NCLAT has referred the decision of "Sampuran Singh and Ors. v. Niranjan Kaur and Ors.-- (1999) 2 SCC 679", in which the Hon'ble Supreme Court held that "Further, in absence of any record of acknowledgment, the Appellant cannot derive any advantage of Section 18 of the Limitation Act", therefore, in our considered view, Section 18 of the Limitation Act was not before the Hon'ble NCLAT even in the case of Ishrat Also case and before the Hon'ble Supreme Court in Sampuran Singh and Ors. case and acknowledgement of debt under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... drawal of its claim and accordingly, the RP communicated vide email dated 19.03.2020, therefore, of course on the date of filing of this application, the RP had not communicated to the petitioner regarding his acknowledgement for withdrawal of its claim but after the filing of the application and before the application was taken up for hearing, the RP had communicated to the petitioner regarding the withdrawal of the claim. 34. Now, at this juncture, we would like to refer the submission made on behalf of the respondent, who in course of his arguments submitted that the petitioner cannot be permitted to file its claim against the parent company of the respondent i.e. EIEL and also against the Corporate Debtor/respondent of this case and he further submitted that the RP has still not file the report for change in the constitution of the CoC and he further submitted in the case of Dr. Vishnu Kumar Aggarwal v. M/s. Piramal Enterprises Ltd. Company Appeal (AT) (Insolvency) No. 346 of 2018, the application filed by the petitioner is barred because under law Forum Shopping is not permissible. 35. He further submitted that the RP does not have power to allow the withdrawal of any admitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P vide email dated 19.03.2020 informed the petitioner that he acknowledged his withdrawal of claim, therefore, we find that of course on the date of filing of application i.e. 04.03.2020 although, the petitioner claimed that he informed the RP for the withdrawal of the claim but the IRP/RP has not communicated its acknowledgement on the date of filing of application i.e. 04.03.2020 rather it was communicated after the filing of application i.e. 19.03.2020, at present, we noticed that there is no such claim pending before any IRP and this fact also been not reverted by the Ld. Counsel for the respondent rather he claimed that when the petitioner had filed this application at that time, the IRP had not communicated or not given his consent for withdrawal. 38. We have already discussed the provision of law and we are of the considered view that Section 12A is not applicable, so far the claim filed by the person before the IRP is concerned. The decisions upon which, the petitioner has placed reliance, in our considered view the facts of that decision is different from the facts of the case in hand, therefore, none of the decision will help the respondent to substantiate its submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of this application and before the matter was taken up for consideration on 19.03.2020, the IRP acknowledged the withdrawal of the claim of the petitioner, under such circumstances, while considering the application under Section 7, we have to examine only whether there is Financial Debt or there is any default of payment and application is complete under Sub Section 2 of Section 7 and there is no disciplinary proceeding pending against the proposed IRP, if all the criteria have been fulfilled then the Adjudicating Authority under Section 7(5) has to admit the application. 44. In the light of that, when we shall consider the case in hand then we find that the applicant has succeeded to establish that there is a financial debt and Corporate Debtor is in default in making the payment of that financial debt, the application is complete and the applicant has also proposed the name of IRP Mr. Anil Kohli having registration number IBBI/IPA-001/IP-P00112/2017-18/10219 Who have also sent the written consent and there is no disciplinary proceeding pending against him. 45. Under such circumstances, we hereby inclined to admit this application and initiate CIRP against the respondent. Si ..... X X X X Extracts X X X X X X X X Extracts X X X X
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