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TMI Blog2022 (2) TMI 1129X X X X Extracts X X X X X X X X Extracts X X X X ..... lant Company is registered as a 'Securitization Company' and 'Reconstruction Company' pursuant to Section 3 of 'The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002' (for short SARFAESI Act) and acting in its capacity as a 'Trustee' of the 'Reliance ARC 001'. It is the case of the 'Appellant Company' that the CD / Respondent in the year 2012 had approached ING Vyasya Bank Limited (Bank) for grant and sanction of cash credit facilities for an amount of Rs. 10 crore. The Bank had sanctioned a cash credit facility for Rs. 2 crores to the CD. The CD had created 'Security Interest' on movable properties of the CD/its guarantors /mortgagors to secure the said financial facilities. The CD again approached the bank for grant of additional ad hoc credit facilities of Rs. 10 Crore and working capital demand loan of Rs. 50 lakhs in the year 2013 over and above the said cash credit facilities as stated above. The additional facilities were also secured by the interest on moveable properties of the CD/its guarantors /mortgagors to secure the said additional financial facilities. 3. The Ld. Sr. Counsel for the Appellant has also stated that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application under Section 7 of the Code before the Adjudicating Authority. It was also stated that the CD has issued one more letter dated 30.07.2016 (appearing at page 68 of the Reply on behalf of the Respondent Volume -I) acknowledging its outstanding liabilities / dues payable to the Appellant Company and, thereafter, the CD has submitted a 'Settlement Proposal' to the Appellant Company vide letter dated 02.03.2017 (appearing at page no. 71 of the Reply on behalf of Respondent Volume -I). No doubt, it was rejected by the Bank for being at a lower side. The CD has, thereafter, sent another revised settlement proposal vide letter dated 08.03.2018 (appearing at page 75 of the Reply on behalf of the Respondent), 26.06.2018 (appearing at page 77 of the Reply on behalf of the Respondent) and Letter dated 04.12.2018 (appearing at page 81 of the Reply on behalf of the Respondent). 4. It was also stated by the Ld. Sr. Counsel for the Appellant that the Bank/Financial Creditor had rejected the said 'Settlement Proposals' vide letter dated 12.02.2019. The 'Settlement Proposals' are construed as fresh acknowledgment of liability and from each of such 'Settlement Proposals' , time to file a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of the NCLAT and remand the matter back to the NCLT to consider the amended application under Section 7, IBC afresh. All questions are left open. We make it clear that we have not expressed any view on the merits of the matter." B. Laxmi Surana Vs. Union bank of India & ors. Manu/SC/0221/2021 "42. Suffice it to conclude that there is no substance even in the second ground urged by the appellant regarding the maintainability of the application filed by the respondent financial creditor under Section 7 of the Code on the ground of being barred by limitation. Instead, we affirm the view taken by the NCLT and which commended to the NCLAT - that a fresh period of limitation is required to be computed from the date of acknowledgment of debt by the principal borrower from time to time and in particular the (corporate) guarantor/corporate debtor vide last communication dated 08.12.2018. Thus, the application under Section 7 of the Code filed on 13.02.2019 is within limitation." C. Bank of India Vs. Multi ARC Coating and Straps Limited - MANU/NL/0135/2020 "10. We have gone through the matter and having heard learned Counsel for both the sides it appears that keeping in view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4, the Original Lender/Bank handed over the 'Debts' ought to it to the Appellant vide an 'Assignment Agreement'. The Cutoff date under the said 'Assignment Agreement' was 31.08.2014 from which all economic benefits pertaining to the loans availed by the Respondent including all realizations and recovery, if any, made on and after of the cutoff date were to be for the benefit to the Appellant. On 25.05.2015, the Appellant issued a notice under Section 13(2) of the SARFAESI Act. The Respondent issued its response to the notices. On 08.06.2016, the Appellant filed an application under Section 22(1) of the SICA seeking permission of the BIFR to enable it to initiate recovery proceedings against the CD. However, the said Application was not persuaded / moved and no such permission was granted till the repeal of the SICA. On 01.12.2016, SICA was repealed by the provisions of the 'SICA Repeal Act' which came into force on 01.12.2016. The Appellant filed an 'Original Application' No. 97 of 2017 with the DRT on 02.12.2016 alleging that the Respondent alongwith its 'Directors' were liable to pay the dues. 9. The Ld. Sr. Counsel for the Respondent has also made a submission that on 02.03.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ational Services Pvt. Ltd. Vs. Parag Gupta and Associates in Civil Appeal No.23988 of 2017 10. The Adjudicating Authority in its impugned order dated 13.08.2021 has observed as followings: Para 11. Further, this Company Petition has been filed by the Financial Creditor u/s.7 on 08.05.2019. In Part-IV of the Petition the Financial Creditor has put the date of NPA as 30.06.2014. Therefore, the issue relating to limitation arises in the Petition as the Petition prima facie has been filed after more than 5 years. In the Petition no pleadings relating to extension/ exclusion of time to compute the period of limitation has been made. The bench notes that subsequently also no amendments in the Petition relating to extension of limitation or exclusion to compute the period of limitation has been made. It is well settled that the plea of limitation must be specifically pleaded by the Petitioner in their pleadings. In the instant case, the Financial Creditor has not specifically pleaded in its Application that it is within limitation and/ or sought condonation of delay in any respect. The Company Petition "" which has been filed on 07.05.2019 mentions the date of NPA as 30.06.2014. In thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19.09.2014 as the account was not in the books of ARC/Appellant. It is the Kotak Mahindra Bank which has come in place of assigner, ING Vyasya Bank Limited. Hence, the Statement of Account is that of Kotak Mahindra Bank. Being the Application filed on 07.05.2019 with the Adjudicating Authority. ING Vyasya bank was no longer in existence and was merged with Kotak Mahindra Bank. e. Section 7 of the Code is concerned with only two factors. There must be a 'debt' and it must be 'due' and 'payable' in the law and there is a 'default'. The Respondent is not refuting the 'Debt' nor they are refusing that it was not due and payable in law except the Limitation issue and computation of default. For brevity and clarity, the provision of Section 7 of the Code is depicted below: "Section 7: Initiation of corporate insolvency resolution process by financial creditor. 7. (1) A financial creditor either by itself or jointly with [other financial creditors, or any other person on behalf of the financial creditor, as may be notified by the Central Government] may file an application for initiating corporate insolvency resolution process against a corporate debtor before the Adjudicating Author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of other evidence furnished by the financial creditor under sub-section (3). [Provided that if the Adjudicating Authority has not ascertained the existence of default and passed an order under sub-section (5) within such time, it shall record its reasons in writing for the same.] (5) Where the Adjudicating Authority is satisfied that- (a) a default has occurred and the application under sub-section (2) is complete, and there is no disciplinary proceedings pending5 against the proposed resolution professional, it may, by order, admit such application; or (b) default has not occurred or the application under sub-section (2) is incomplete or any disciplinary proceeding is pending against the proposed resolution professional, it may, by order, reject such application: Provided that the Adjudicating Authority shall, before rejecting the application under clause (b) of subsection (5), give a notice to the applicant to rectify the defect in his application within seven days of receipt of such notice from the Adjudicating Authority. (6) The corporate insolvency resolution process shall commence from the date of admission of the application under sub-section (5). (7) The Adjud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 & 113 "96. Section 238A of the IBC provides as follows:- "238A. The provisions of the Limitation Act, 1963 (36 of 1963) shall, as far as may be, apply to the proceedings or appeals before the Adjudicating Authority, the National Company Law Appellate Tribunal, the Debt Recovery Tribunal or the Debt Recovery Appellate Tribunal, as the case may be." 97. As observed by this Court in Sesh Nath Singh & Anr. Vs. Baidyabati Sheoraphuli (supra), authored by one of us (Indira Banerjee, J.), this Court held:- "91. Legislature has in its wisdom chosen not to make the provisions of the Limitation Act verbatim applicable to proceedings in NCLT/NCLAT, but consciously used the words 'as far as may be'. The words 'as far as may be' are not meant to be otiose. Those words are to be understood in the sense in which they best harmonise with the subject matter of the legislation and the object which the Legislature has in view. The Courts would not give an interpretation to those words which would frustrate the purposes of making the Limitation Act applicable to proceedings in the NCLT/NCLAT 'as far as may be'. xxx xxx xxx 94. The use of words 'as far as may be', occurring in Section 238 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is meant to explain not define. Judges interpret statutes, their words are not to be interpreted as statutes." The aforesaid passage was extracted and incorporated as part of the judgment of this Court in Sesh Nath Singh (supra). 108. In this case, admittedly there were fresh documents before the Adjudicating Authority (NCLT), including a letter of offer dated 3.03.2017 for one time settlement of the dues of the Corporate Debtor to the Financial Creditor, upon payment of Rs. 5.5 crores. The Appellant Bank has also relied upon financial statements up to 31 st March, 2018 apart from the final judgment and order dated 27 th March, 2017 in O.A. 16/2015 and the subsequent Recovery Certificate No.2060/2017 dated 25th May, 2017 which constituted cause of action for initiation of proceedings under Section 7 of the IBC. 110. It is not necessary for this Court to examine the relevance of all the documents filed by the Appellant Bank pursuant to its interim applications being I.A. No.27 of 2019 and I.A. No.131 of 2019. Suffice it to mention that the documents enclosed with the applications being I.A. No.27 of 2019 and I.A. No.131 of 2019 and the pleadings in the supporting affidavits, mad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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