9911796707
TMI Blog2019 (12) TMI 1587X X X X Extracts X X X X X X X X Extracts X X X X ..... ment Company Private Limited vide Deed of 'Corporate Guarantee' dated 6th November, 1987 and pursuant to another petition filed by the Appellant against the said 'Corporate Guarantor' being CP No.2527 of 2018 for the same debt and default. 2. Reliance has been placed on decision of this Appellate Tribunal in "Dr. Vishnu Kumar Agarwal vs. M/s. Piramal Enterprises Ltd. - Company Appeal (AT) (Insolvency) No.346 of 2018" judgment dated 8th January, 2019, wherein this Appellate Tribunal has held that once for same set of claim application under Section 7 filed by the 'Financial Creditor' is admitted against one of the 'Corporate Debtor' ('Principal Borrower' or 'Corporate Guarantor(s)'), second application by the same 'Financial Creditor' for same set of claim and default cannot be admitted against the other 'Corporate Debtor' (the 'Corporate Guarantor(s)' or the 'Principal Borrower'). 3. Learned Counsel appearing on behalf of the Appellant submitted that the judgment in Dr. Vishnu Kumar Agarwal is not applicable in the present case. Even without initiating 'Corporate Insolvency Resolution Process' against the 'Principal Borrower', it can be initiated against the 'Corporate Guarantor' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellate Tribunal, challenging the final order passed by the Debts Recovery Tribunal. The Debts Recovery Appellate Tribunal disposed of the waiver applications and directed the Appellant to deposit a sum of Rs. 40 crores within four weeks, but Appellant committed default as alleged by the Respondent. 8. As the application under Section 7 of the I&B Code was filed by the Appellant on 10th July, 2018, for the said reason, the Respondent has taken a plea that the application under Section 7 was barred by limitation. 9. In the case of "Jignesh Shah and Another v. Union of India and Another─ (2019) SCC OnLine SC 1254", the Hon'ble Supreme Court noticed the provisions of Section 238A of the I&B Code and relevant provisions including Sections 7 and 9 of the I&B Code to decide the question of limitation. The Hon'ble Supreme Court observed and held as follows:-- "8. In paragraph 7 of the said judgment, the Report of the Insolvency Law Committee of March, 2018 was referred to as follows: "7. Having heard the learned counsel for both sides, it is important to first set out the reason for the introduction of Section 238A into the Code. This is to be found in the Report of the Insolv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was further noted that the Limitation Act may not apply to applications of corporate applicants, as these are initiated by the applicant for its own debts for the purpose of CIRP and are not in the form of a creditor's remedy." (emphasis supplied) The Hon'ble Supreme Court further noticed the arguments, observed and held: "13. Dr. Singhvi relied upon a number of judgments in which proceedings under Section 433 of the Companies Company Appeal (AT) (Insolvency) No.650 of 2019 Page 7 of 13 Act, 1956 had been initiated after suits for recovery had already been filed. These judgments have held that the existence of such suit cannot be construed as having either revived a period of limitation or having extended it, insofar as the winding up proceeding was concerned. Thus, in Hariom Firestock Limited v. Sunjal Engineering Pvt. Ltd., (1999) 96 Comp Cas 349, a Single Judge of the Karnataka High Court, in the fact situation of a suit for recovery being filed prior to a winding up petition being filed, opined: "8 ...To my mind, there is a fallacy in this argument because the test that is required to be applied for purposes of ascertaining whether the debt is in existence at a part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 cannot be ordered due to non-payment of the said debt." 16. In Dr. Dipankar Chakraborty v. Allahabad Bank, 2017 SCC OnLine Cal 8742, the fact situation was that a suit had been filed by the petitioner in the City Court at Calcutta for damages against the Allahabad Bank. The Bank, in turn, filed a proceeding under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 in 2001 before the Debt Recovery Tribunal, Calcutta. The Civil Suit was also transferred to the Debt Recovery Tribunal, Calcutta where both proceedings were pending adjudication. Meanwhile, under the Securitisation and Restructure of Financial Assets and Enforcement of Securities Interest Act, 2002 (hereinafter referred to as the "SARFAESI Act"), a notice dated 3rd March, 2016 was issued under Section 13(2) of the SARFAESI Act. The question which arose before the Court was whether the invocation of the SARFAESI Act, being beyond limitation, would be saved because of the pending proceedings under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. The Court negatived the plea of the Bank, stating: "22. Section 14 of the Limitation Act, 1963 permits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t upon and pursuant to the notice under Section 13(2) of the Act of 2002 dated July 5, 2011 are quashed including such notice." Finally the Hon'ble Supreme Court held: "21. The aforesaid judgments correctly hold that a suit for recovery based upon a cause of action that is within limitation cannot in any manner impact the separate and independent remedy of a winding up proceeding. In law, when time begins to run, it can only be extended in the manner provided in the Limitation Act. For example, an acknowledgement of liability under Section 18 of the Limitation Act would certainly extend the limitation period, but a suit for recovery, which is a separate and independent proceeding distinct from the remedy of winding up would, in no manner, impact the limitation within which the winding up proceeding is to be filed, by somehow keeping the debt alive for the purpose of the winding up proceeding." 10. Similar issue fell for consideration before the Hon'ble Supreme Court in "Gaurav Hargovindbhai Dave vs. Asset Reconstruction Company (India) Ltd. & Anr. in Civil Appeal No.4952 of 2019. The said case was disposed of on 18th September, 2019. In the said case, the Hon'ble Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
