9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (9) TMI 948 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT - The Corporate Debtor failed to adhere to the terms and conditions of the said restructured cum sanctioned letter and defaulted in payment of the outstanding dues to the Financial Creditor. Thereafter, the Financial Creditor on 07 May, 2018 sent a notice under section 13 (2) of the SARFAESI Act, 2002. As per the records the account of the Corporate Debtor was declared as NPA as on 28 February, 2018. Upon perusal of the Pending restructural proposal vis-a-vis OTS of the loan in the name of the Corporate Debtor is adequate enough to attract section 18 of the Limitation Act, 1882, which envisages that the acknowledgment of debt within the period of limitation would give rise to a fresh period of limitation. The present petition made by the Financial Creditor is complete in all respects as required by law. The Petition establishes that the Corporate Debtor is in default of a debt due and payable and that the default is more than the minimum amount stipulated under section 4 (1) of the Code, stipulated at the relevant point of time - Petition admitted - moratorium declared.
Issues Involved:
1. Default in repayment by the Corporate Debtor. 2. Barred by limitation. 3. Multiple proceedings under SARFAESI Act, 2002. 4. Reconciliation and adjustment of amounts already paid. 5. Acknowledgment of debt and its impact on the limitation period. Issue-wise Detailed Analysis: Default in repayment by the Corporate Debtor: The Financial Creditor, UCO Bank, initiated the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor under section 7 of the Insolvency and Bankruptcy Code, 2016. The Corporate Debtor defaulted on a sum of Rs.9,56,64,393.25 as of 30 December, 2020. The Financial Creditor had provided several credit facilities, including term loans and cash credit limits, which were renewed and enhanced multiple times. Despite these accommodations, the Corporate Debtor failed to make timely repayments, leading to the account being classified as Non-Performing Asset (NPA) on 28 February, 2018. Barred by limitation: The Corporate Debtor contended that the application was barred by limitation. However, the Tribunal noted that the acknowledgment of debt within the limitation period would give rise to a fresh period of limitation under section 18 of the Limitation Act, 1963. The Tribunal referred to a letter dated 17 November, 2020, which was considered an acknowledgment of debt, thus attracting section 18 and providing a fresh limitation period. Multiple proceedings under SARFAESI Act, 2002: The Corporate Debtor argued that the Financial Creditor had already initiated proceedings under the SARFAESI Act, 2002, and issued a possession notice, thus should not be allowed to file the instant application. The Tribunal, however, did not find this argument sufficient to bar the current proceedings under the Insolvency and Bankruptcy Code, 2016. Reconciliation and adjustment of amounts already paid: The Corporate Debtor claimed that the account needed reconciliation and adjustment for amounts already paid, including the sale proceeds of mortgaged property amounting to Rs.1,20,63,000/-. The Tribunal did not specifically address this issue in detail but focused on the overall default and acknowledgment of debt. Acknowledgment of debt and its impact on the limitation period: The Tribunal relied on the acknowledgment of debt through the pending restructuring proposal and the One-Time Settlement (OTS) proposal dated 17 November, 2020. Citing the judgment in Tejas Khandhar v Bank of Baroda, the Tribunal held that an OTS proposal falls within the definition of 'acknowledgment of debt' under section 18 of the Limitation Act, 1963. This acknowledgment provided a fresh period of limitation, thus making the petition filed by the Financial Creditor timely. Order: The Tribunal admitted the application under section 7 of the Insolvency and Bankruptcy Code, 2016, initiating the CIRP against the Corporate Debtor. A moratorium under section 14 of the Code was declared, and Mr. Madhur Agarwal was appointed as the Interim Resolution Professional (IRP). The IRP was directed to carry out functions as per the Code, and the Financial Creditor was instructed to deposit Rs.5,00,000/- for expenses related to public notice and inviting claims. The Tribunal also directed the communication of the order to relevant parties and scheduled a progress report filing on 02.11.2022.
|
