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2021 (5) TMI 578 - Tri - Insolvency and BankruptcyRejection of claim of financial debt filed by the Applicant with the Resolution professional - section 60(5) of the Insolvency and Bankruptcy Code 2016 r/w Rule 11 of the National Company Law Tribunal Rules 2016 - HELD THAT - The Applicant has annexed all the necessary documents required to establish a debt further the Applicant has submitted his claim in Form-C within the stipulated period from the public announcement as per the Code and the Regulations. It is well settled that the date of default/NPA has to be taken as date for ascertaining limitation. The Applicant has rightly taken support from the case decided by the Hon ble NCLAT New Delhi in the matter of MR. HARSUKBHAI P. LAKKAD VERSUS BANK OF BARODA (ERSTWHILE DENA BANK) ANOTHER 2020 (8) TMI 496 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI in where it was held that the date of default/NPA is to considered for counting the period of limitation under Article 137 of the Limitation Act 1963. There has been no written acknowledgement of debt however the date of NPA being 06.11.2019 has to be considered as the date of default. The claim is therefore well within period of limitation and hence cannot be rejected for that reason - Further the annexures include Hypothecation Agreement Deeds of Guarantee for each of the loans. Acknowledgement of debt is not a prerequisite for a claim to be accepted. What is to be seen is whether there are documents to show that there is a debt which has been defaulted - It is clear from the perusal of the application and the rejection communications that the Resolution Professional has erroneously rejected the claim of the Applicant. Application allowed.
Issues Involved:
1. Rejection of financial debt claim by the Resolution Professional (RP). 2. Determination of the period of limitation for the claim. 3. Requirement of acknowledgment of debt for claim acceptance. 4. Jurisdiction and role of the Interim Resolution Professional (IRP)/Resolution Professional (RP). Issue-wise Detailed Analysis: 1. Rejection of financial debt claim by the Resolution Professional (RP): The Applicant, Hero Fincorp Limited, sought intervention to set aside the RP's communications dated 24.04.2020 and 14.06.2020, which rejected its financial debt claim. The RP had declined the claim citing it was barred by limitation and for non-submission of acknowledgment of debt. The Tribunal noted that all necessary documents, including loan agreements and guarantees, were annexed by the Applicant to establish the debt. The RP's rejection was deemed erroneous, and the Tribunal set aside the RP's communications, allowing the Applicant's claim. 2. Determination of the period of limitation for the claim: The RP initially rejected the claim on the grounds that it was barred by limitation, referencing the Supreme Court's decision in B.K Educational Services. The Applicant argued that the limitation period should be reckoned from the date of the account being classified as Non-Performing Asset (NPA) on 06.11.2019, not from the date of the loan agreements. The Tribunal upheld the Applicant's position, stating that the date of default/NPA should be considered for counting the limitation period under Article 137 of the Limitation Act, 1963. Thus, the claim was within the limitation period and could not be rejected on these grounds. 3. Requirement of acknowledgment of debt for claim acceptance: The RP requested acknowledgment of debt from the Applicant, which was not provided. The Applicant contended that acknowledgment of debt is not the sole criterion for determining the period of limitation and that the classification of the account as NPA and the last payment date should be considered. The Tribunal agreed, stating that acknowledgment of debt is not a prerequisite for claim acceptance. The existence of documents showing a debt default is sufficient. The Tribunal found that the Applicant had provided adequate documentation to establish the debt. 4. Jurisdiction and role of the Interim Resolution Professional (IRP)/Resolution Professional (RP): The Applicant argued that the RP exceeded his jurisdiction in determining the claim's limitation and rejecting it. Citing the Supreme Court's decisions in 'Swiss Ribbons Pvt. Ltd. & Anr v. Union of India & Ors.' and 'Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta & Others,' the Applicant asserted that the IRP/RP's role is administrative, not adjudicatory. The Tribunal concurred, emphasizing that the RP should not have adjudicated on the limitation issue and should have accepted the claim based on the provided documentation. Conclusion: The Tribunal concluded that the RP erroneously rejected the Applicant's claim. The communications dated 24.04.2020 and 14.06.2020 from the RP were set aside. The Tribunal allowed I.A. No. 90 of 2021 in C.P. (IB) No. 342/BB/2019, thereby accepting the Applicant's financial debt claim.
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