2023 (2) TMI 375 - AT - Insolvency and Bankruptcy

Part rejection of claim made by the Resolution Professional - time limitation - Whether the entire claim was barred by time and the fact the Resolution Professional has accepted part of claim shall not give any extension of limitation to the Appellant? - HELD THAT - The Adjudicating Authority came to the conclusion that claim is barred by time since the transaction which was entered, was agreement of sale dated 27th June, 2014. The Application under Section 7 was filed in the year 2019 which was admitted by the Adjudicating Authority on 03.10.2019. The claim of the Appellant was submitted on 17.11.2020. The submission which has been pressed by the Learned Counsel for the Appellant is on the basis of part-acceptance of the claim by RP. Reliance placed on Judgement of Bishal Jaiswal 2021 (4) TMI 753 - SUPREME COURT . The law as was laid down by the Hon ble Supreme Court in Bishal Jaiswal that on the basis of is a clear acknowledgment in a Balance Sheet, the limitation under Section 18 extended. The Hon ble Supreme Court in above case was considering the entries in the Balance Sheet for the purposes of acknowledgement under Section 18 of Limitation Act - It is not the case of the Appellant that any acknowledgement by the Corporate Debtor was made in the Balance Sheet or there is any material brought on record by the Appellant which contain any acknowledgement within meaning of Section 18 of the Limitation Act, 1963. It is to be noted that part acceptance of claim was not under challenge before the Adjudicating Authority and Application was filed by the Appellant against the rejection of the rest of the claim. By any statement made in the Affidavit of Reply by the RP while replying the Application, can not be treated to be an acknowledgement within the meaning of Section 18 of the Limitation Act, 1963. In the present case, issue is not as to whether acceptance of the part claim was in accordance with law or not, the issue is as to whether, rejection of the part claim required any interference. Adjudicating Authority having come to the conclusion that claim was barred by time, there has to be material to indicate that Appellant is entitled for benefit of Section 18 of the Limitation Act, there being no material on record for the extension of limitation under Section 18, no benefit can be granted to the Appellant. Appeal dismissed.

Summary

Issues:
Appeal against part rejection of claim by Resolution Professional based on limitation period and part acceptance of claim.

Analysis:
1. The appeal was filed against the Order passed by the Adjudicating Authority, challenging the part rejection made by the Resolution Professional regarding the claim of the Appellant.
2. The Adjudicating Authority observed that the claim was barred by limitation as per the agreement to sell dated 27.06.2014, with a fixed completion date of 30.08.2014, leading to the expiration of limitation on 30.08.2017.
3. The Appellant argued that the part acceptance of the claim by the Resolution Professional should be treated as an acknowledgment for an extension of limitation, citing relevant case laws.
4. The Resolution Professional contended that the entire claim was time-barred, and the acceptance of part of the claim did not extend the limitation period, emphasizing the approval and implementation of the Resolution Plan.
5. The Tribunal considered the submissions and records, noting the Appellant's reliance on the RP's affidavit regarding part acceptance of the claim and relevant case laws on limitation extension through acknowledgment in the Balance Sheet.
6. The Tribunal analyzed the legal principles from the cited judgments, emphasizing the need for a clear acknowledgment in the Balance Sheet for extension of limitation under Section 18 of the Limitation Act, which was not demonstrated in the present case.
7. The Tribunal concluded that the part acceptance of the claim did not constitute an acknowledgment under Section 18, and as there was no material supporting an extension of limitation, the Adjudicating Authority's decision to reject the claim as time-barred was upheld.
8. The Tribunal dismissed the Appeal, finding no error in the Adjudicating Authority's Order, and held that the Appellant was not entitled to the benefit of Section 18 of the Limitation Act based on the facts presented.

This detailed analysis highlights the key legal arguments, case laws, and the Tribunal's reasoning in upholding the Adjudicating Authority's decision regarding the time-barred claim and the lack of sufficient evidence for an extension of limitation period.