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TMI Blog2024 (11) TMI 801X X X X Extracts X X X X X X X X Extracts X X X X ..... al Creditor- 'Rushabh Civil Contractors Private Limited' disbursed an amount of Rs.3.50 Crores to the Corporate Debtor on 16.12.2016. The Corporate Debtor on amount of Rs.3.50 Crores booked interest as well as TDS in its ledger. On 27.06.2022, NCLT Mumbai Bench admitted Section 7 application against the Financial Creditor. The IRP of the Financial Creditor after looking into the books of account of the Corporate Debtor came to notice that an amount of Rs.4,85,46,862/- is due on the Corporate Debtor as on 31.03.2020. A notice dated 29.11.2022 was issued by the IRP to the Corporate Debtor demanding an amount of Rs.4,74,48,109/- within seven days. The notice sent by the Financial Creditor was not replied. A CP(IB) No.244 of 2023 was filed by the Financial Creditor through IRP claiming the total outstanding amount of Rs.9,56,83,836/-, as on 31.03.2022, date of default mentioned in Part-IV of Section 7 application was 07.12.2022. The Corporate Debtor filed a reply in Section 7 application that the Petitioner (Financial Creditor) has failed to prove that there is financial debt present in the case. It was further pleaded that the loan was disbursed on 16.12.2016 and the application filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red on 15.12.2019 and application under Section 7 filed in the year 2023 by the Financial Creditor is barred by time. It is further submitted that the letter dated 20.08.2020 which was written by the Corporate Debtor to the Financial Creditor undertaking to pay the amount by 01.12.2020, the default arose on 01.12.2020 i.e. during period of Section 10A, hence, the application filed by the Financial Creditor was barred by Section 10A. 5. Counsel for the Respondent No.1 refuted the submissions of the Counsel for the Appellant and submits that the financial debt was proved from the materials on record including the ledgers of the corporate debtor and the financial creditor. Both the ledgers contemplate payment of interest which means that there was financial debt. It is submitted that the loan was payable on demand and demand notice was issued by the IRP on 29.11.2022 demanding payment within seven days, hence, the date of default is 07.12.2022 which is not covered by Section 10A. It is submitted that the default having been committed on 07.12.2022, there is no question of application being barred by time. 6. We have considered the submissions of the Counsel for the parties and perus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore Six Lakh Eighty Three Thousand Eight Hundred and Thirty Six Only) The said amount of debt is granted as financial assistance to the Corporate debtor to be repaid as and when demanded by the Financial Creditor. THE DATE ON WHICH THE DEFAULT OCCURRED: 07th December 2022 Legal Notice dated 29th November, 2022 demanding payment was sent on 30th November 2022 thereby calling upon the Corporate Debtor to repay the advance amount along with interest within seven days of receipt of the notice. 10. The first issue to be answered is as to whether Financial Creditor has been able to prove that there was financial debt. It is relevant to notice that in Section 7 application, the financial creditor has filed its ledger with regard to corporate debtor which is part of Section 7 application and as per the ledger as on 31.03.2020 amount outstanding was Rs.4,74,48,109/-. The ledgers indicate that there was entry of payment of interest as on 31.03.2017, 31.03.2018, 31.03.2019 and 31.03.2020. Payment of TDS was also mentioned. 11. The disbursement by the Financial Creditor is not even denied. The Corporate Debtor itself has filed documents before the Adjudicating Authority which cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Schedule of the Limitation Act, 1963, which is as follows:- "THE SCHEDULE (PERIODS OF LIMITATION) [See sections 2(j) and 3] FIRST DIVISION-SUITS PART II.-SUITS RELATING TO CONTRACTS Description of suit Period of limitation Time from which period begins to run 21. For money lent under an agreement that it shall be payable on demand. Three years. When the loan is made. 14. Counsel for the Appellant has also relied on the judgment of the Hon'ble Supreme Court in "Radha Exports (India) Pvt. Ltd. vs. K.P. Jayaram & Anr.- (2020) 10 SCC 538". The judgment of the Radha Exports (supra) which has been relied by the Counsel for the Appellant has referred to Article 21 of the Limitation Act. In the above case, an amount of Rs. 2.10 Crore was advanced to Radha Exports, the proprietorship which had taken the loan was subsequently incorporated. The Respondent wrote to the company to convert a sum of Rs.90 Lacs from out of the said outstanding loan as share application money in the name of Respondent No.2 which was confirmed. Subsequently, Respondent No.2 wrote to the Appellant company to treat the share application money of Rs.90 Lakhs as share application money of one Mr. M. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istered or is a promise to compensate for something done or is a promise to pay a debt barred by limitation law.- An agreement made without consideration is void, unless- (1) it is expressed in writing and registered under the law for the time being in force for the registration of 1 [documents], and is made on account of natural love and affection between parties standing in a near relation to each other ; or unless (2) it is a promise to compensate, wholly or in part, a person who has already voluntarily done something for the promisor, or something which the promisor was legally compellable to do; or unless; (3) it is a promise, made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorized in that behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits. In any of these cases, such an agreement is a contract. Explanation 1.-Nothing in this section shall affect the validity, as between the donor and donee, of any gift actually made. Explanation 2.-An agreement to which the consent of the promisor is freely given is not void merely becau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake the said promise enforceable within a period of three years and the application which was filed by the financial creditor dated 20.01.2023 cannot be said to be barred by time. Hence the application under Section 7 cannot be held to be barred by time relying on Article 21 of the Limitation Act. 18. Another issue raised by the Appellant is for holding the application barred by Section 10A. The Appellant's case itself is that the loan advanced was payable on demand. According to the own case of the Appellant, limitation of three years will start from the date when loan is made i.e. on 16.12.2016 and the period of limitation shall come to an end on 15.12.2019. Letter dated 20.08.2020 on which Appellant is claiming that the application is barred by Section 10A is the undertaking given by the corporate debtor to make the payment on 01.12.2020. By letter dated 20.08.2020, a date has been given for repayment with regard to loan which according to the corporate debtor itself limitation for filing a proceeding for repayment came to an end on 15.12.2019 because of Article 21 of the Limitation Act. Corporate Debtor cannot be allowed to choose a date of default of its own which falls withi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perusal of the books of accounts and records of the Corporate Debtor, our client has noticed that loans and advances of Rs.4,74,48,109 (Rupees Four Crore Seventy-four Lakh Forty-eight Thousand One Hundred Nine Only) ("Advance Amount") along with the interest thereon is due and payable by you to the Corporate Debtor. The copy of the relevant ledger account in the books of the Corporate Debtor is attached herewith as Exhibit- A. 4. We further say that if you believe that the Advance Amount has been repaid by you, please furnish the proof of such payment of the dues by sending us the following within seven days from the date of receipt of this notice. i An attested copy of the record of electronic transfer of the unpaid amount оr, ii. An attested copy of record that Corporate Debtor has received the payment. 5. Hence, you are hereby requested to repay the Advance Amount along with the interest @18% thereon, till date, within seven days of receipt of this notice, failing which our client has instructed us to initiate appropriate legal proceeding for recovery of the same. Thanking you Kaustubh Santosh Gaonkar Advocate of Debi Prasanna Sarangi Resolution Pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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