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2020 (2) TMI 478 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - time limitation - HELD THAT - Considering the fact that the Appellant/ Corporate Debtor had made a payment of three Lakhs through Cheque on 18.03.2015 and that the said payment was made after the issuance of Loan Recall notice dated 06.05.2014 and later a demand notice dated 17.08.2017 was issued by the Respondent to the Appellant / Corporate Debtor and co-borrower in respect of the loan agreement dated 28.03.2018 where the Corporate Debtor had agreed to pay ₹ 1,08,755/- per month beginning from 30.03.2013 to 30.03.2016 and also this Tribunal keeping in mind that the application u/s 7 of the I B Code was filed by the Respondent / Applicant before the Adjudicating Authority on 16.12.2017, this Tribunal comes to a consequent conclusion that the claim of the Respondent / Applicant is not barred by the plea of Limitation. The present Appeal fails and the same is dismissed but without costs.
Issues Involved:
1. Barred by Limitation 2. Service of Application on the Appellant 3. Nature of Debt and Default 4. Acknowledgement of Debt and Limitation Period Detailed Analysis: 1. Barred by Limitation: The Appellant contended that the application was barred by limitation, arguing that the cause of action for the Respondent's claim arose on 6th May 2014, when the loan recall cum demand notice was issued. The Appellant cited the Supreme Court's decisions in "Jignesh Shah & Ors. Vs. Union of India & Ors." and "Gaurav Hargovind Bhai Dave Vs. Asset Reconstruction Company (India) Ltd. & Ors." to support their argument on the limitation aspect under the I&B Code. The Tribunal, however, concluded that the claim was not barred by limitation. It noted that the Appellant had made a payment of three lakhs through cheque on 18th March 2015, which was after the issuance of the loan recall notice. The Tribunal also considered the demand notice dated 17th August 2017 and the application under Section 7 of the I&B Code filed on 16th December 2017, determining that the claim was within the limitation period. 2. Service of Application on the Appellant: The Appellant argued that the application was never effectively served on them, as the notice sent to the registered address was returned with the endorsement "Addressee Left" and no substituted service was ordered. The Appellant also pointed out that the Respondent did not attempt to serve the notice via email, despite having the Appellant's email address. The Tribunal found that the service of notice was correctly made to the registered address available in the Master Data with ROC. It opined that the service was avoided by the Appellant and that sending the notice through registered post to the correct address constituted a correct mode of service in law. The Tribunal did not find the non-serving of notice via email to be fatal to the case. 3. Nature of Debt and Default: The Tribunal observed that the nature of the debt was a "Financial Debt" as defined under Section 5(8) of the I&B Code, and there was a "Default" as defined under Section 3(12) of the Code on the part of the Corporate Debtor. The Financial Creditor had established that the loan was sanctioned and duly disbursed to the Corporate Debtor, but there was non-payment of the balance debt. The Tribunal noted that the Corporate Debtor and its Director were jointly and severally liable to repay the loan together with interest and all other dues arising out of the loan agreement. The Tribunal also highlighted that the Corporate Debtor had repeatedly defaulted in making payments despite receiving several requests and reminders from the Financial Creditor. 4. Acknowledgement of Debt and Limitation Period: The Tribunal emphasized that an acknowledgment of debt in writing within the expiration of the prescribed period would mark a new commencement period for limitation. It noted that the payment of three lakhs made by the Corporate Debtor on 18th March 2015 extended the limitation period. The Tribunal referred to Section 18 of the Limitation Act, 1963, which states that an acknowledgment of liability not only saves the limitation period but also confers a cause of action to lay a claim. The Tribunal concluded that the claim of the Respondent/Applicant was not barred by limitation, considering the payment made by the Corporate Debtor and the subsequent demand notice and application filed within the extended limitation period. Conclusion: The appeal was dismissed, and the Tribunal directed the Appellant to file a certified copy of the impugned order dated 3rd October 2018 within four days. All pending IAs were closed.
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