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TMI Blog2023 (4) TMI 1256X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to Adjudicating Authority) Rules, 2016 (in short 'Code') by the IDBI Bank Limited (Financial Creditor) is admitted and Pankaj Kumar Tibrewal has been appointed as the Interim Resolution Professional (in short 'IRP'). However, at the time of preliminary hearing of this appeal on 20.12.2022, notice was issued to the Respondents and it was ordered that "no further steps shall be taken in pursuance of the impugned order". 2. Brief facts of this case are that the IDBI Bank Limited (in short 'Bank') sanctioned cash credit limit of the Corporate Debtor to the tune of Rs. 8,50,000/- which was later on enhanced to Rs. 15,54,000/-. According to the Bank, the Corporate Debtor was in default of payment of Rs. 15,22,21,838.58/- including interest calculated as on 01.08.2019. The Bank has also alleged that the directors of the Corporate Debtor executed five separate guarantee agreements on 13.07.2009 and the Corporate Debtor entered into a tripartite inter-se agreement with the Bank and West Bengal Industrial Development Corporation Limited on 16.06.2010 to create hypothecation of the plant and machinery both present and future and collateral security for the facilities. It is alleged that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in his views will save limitation and (iii) the OTS proposal. He is permitted to do so in view of the Hon'ble Supreme Court Judgment dated 04.08.2021 in the case of Dena Bank (now Bank of Baroda) Vs. C. Shiva Kumar Reddy. The supplementary affidavit shall be filed within a period of 10 days from today. Copy thereof shall be served on the counsel on record of the Corporate Debtor. The Corporate Debtor to file reply within 10 days if need be to the Supplementary Affidavit. List this matter after completion of pleadings on 06.12.2021." 5. Apropos the aforesaid order dated 03.11.2021, the Bank filed the Supplementary Affidavit in which it disclosed the date of default, date on which the payment was received from the Corporate Debtor etc. Para 20 of the Supplementary Affidavit in which the dates have been mentioned is reproduced as under:- "20. A statement showing the series of events for the accounts of the Corporate Debtor maintained with the Applicant Bank:- Saraju Flour Mills Pvt. Ltd. Sl. No. Particulars Date 1. Date of Default 31.08.2013 2. Date of NPA 31.03.2014 3. Date of Representation u/s 13(3) of SARFAESI Act, 2002 21.11.2014 4. Payment received from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther by itself or jointly with 2[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 Authority when a default has occurred." 8. She has further submitted that the date of default triggers the period of limitation which is provided under Article 137 of the Limitation Act, 1963 (in short 'the Act'). Article 137 of the Act is reproduced as under:- Description of suit Period of limitation Time from which period begins to run Any other application for which no period of limitation is provided elsewhere in this division. Three years. When the right to apply accrues. 9. It is further submitted that admittedly the application under Section 7 of the Code has been filed on 18.10.2019 whereas the date of default is given as 31.08.2013 and the period of three years had expired on 31.08.2016. It is further submitted that there has been no acknowledgment in between 31.08.2013 to 31.0.2016 to attract Section 18 of the Act for the purpose of extension of period of limitation. 10. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red to OTS for the purpose of bringing the application filed under Section 7 of the Code within the limitation on the ground that the OTS was approved in January, 2019 and the application was filed on 18.10.2019. However, it is submitted that even the OTS has to occur during the currency of the period of limitation and it cannot extend the period of limitation which had already expired. 13. On the other hand, though Counsel for Respondent has submitted that the date of default has been mentioned as 31.08.2013 in the supplementary affidavit but limitation would trigger from the date of NPA which is specifically mentioned in Form 1 as the date of default. It is further submitted that since the date of default is 31.03.2014, therefore, it will run up to 31.03.2017 and since the Appellant had deposited a sum of Rs. 2.75 Lakh on 29.03.2017 in their account, therefore, the limitation would further extend from 29.03.2017 to 29.03.2020 in view of Section 19 of the Act and as the application under Section 7 of the Code is filed on 18.10.2019, therefore, it has to be taken to have been filed within the period of limitation. He has also submitted that there has been one time settlement (OTS) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2016 and shall expire w.e.f. 01.09.2016. The Bank failed to produce any evidence of acknowledgement of debt on the part of the Appellant during the period from 31.08.2013 to 31.08.2016. Faced with these difficulties, the Bank has tried to project the date of NPA i.e. 31.03.2014 as the date of default to take it up to 31.03.2017 so that it may use the payment of Rs. 2.75 Lakh made on 29.03.2017 in the account as acknowledgment under Section 19 of the Act in order to gain further period of three years from that date i.e. 29.03.2017 till 29.03.2020 to bring the application filed under Section 7 of the Code on 18.10.2019 within the period of limitation. 19. The first question is as to whether the date of default can be changed by the Bank? In this regard, it has been held by the Hon'ble Supreme Court in the case of 'Ramesh Kymal Vs. Siemens Gamesa Renewable Power Pvt. Ltd., (2021) 3 SCC 224' that the date of default cannot be changed. It has also been held in the case of Laxmi Pat Surana (Supra), Babulal Vardharji Gurjar (Supra), B.K Educational Services Pvt. Ltd. (Supra) and Jignesh Shah (Supra) that the period of limitation would be attracted from the date when the default occurs a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extends the period of limitation under s. 20, Limitation Act; but the payment has got to be proved in a particular way and for reason of policy the legislature insists on a written or signed acknowledgment as the only proof of payment and excludes oral testimony. Unless, therefore, there is acknowledgment in the required from, the payment by itself is of no avail. The Subordinate Judge, however, is right in holding that while the section requires that the payment should be made within the period of limitation, it does not require that the acknowledgment should also be made within that period. To interpret the proviso in that way would be to import into it certain words which do not occur there. This is the view taken by almost all the High Courts in India and to us it seems to be a proper view to take (See Md. Moizuddin v. Nalini Bala A.I.R. (24) 1937 Cal 284 : I.L.R. (1937) 2 Cal. 137; Lal Singh v. Gulab Rai 55 All 280, Venkata Subbhu v. Appu Sundaram 17 Mad. 92, Ram Prasad v. Mohan Lal A.I.R. (10) 1923 Nag 117 and Viswanath v. Mahadeo 57 Bom. 453. 10. .......................................If the plaintiff's right of action is apparently barred under the Statute of limitat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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