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2019 (9) TMI 1019 - SC - Indian LawsRecovery of Debt - time limitation - proceedings to recover the NPA under the IBC Act - NCLT applied Article 62 of the limitation act - the NCLT reached the conclusion that since the limitation period was 12 years from the date on which the money suit has become due, the aforesaid claim was filed within limitation and hence admitted the Section 7 application. - HELD THAT - What is apparent is that Article 62 is out of the way on the ground that it would only apply to suits. The present case being an application which is filed under Section 7, would fall only within the residuary article 137 - As rightly pointed out by learned counsel appearing on behalf of the appellant, time, therefore, begins to run on 21.07.2011, as a result of which the application filed under Section 7 would clearly be time-barred. This being the case, we fail to see how this para could possibly help the case of the respondents. Further, it is not for us to interpret, commercially or otherwise, articles of the Limitation Act when it is clear that a particular article gets attracted. It is well settled that there is no equity about limitation - judgments have stated that often time periods provided by the Limitation Act can be arbitrary in nature. Appeal allowed.
Issues:
1) Maintainability of O.As filed in Debt Recovery Tribunal 2) Remand by Gujarat High Court and subsequent Special Leave Petition dismissal 3) Application under Insolvency and Bankruptcy Code - Interpretation of limitation period 4) Applicability of Limitation Act - Article 62 vs. Article 137 5) Arguments regarding limitation period by counsels 6) Interpretation of Limitation Act for Section 7 application 7) Decision on the appeal and setting aside judgments of NCLT and NCLAT Issue 1: Maintainability of O.As filed in Debt Recovery Tribunal The Respondent No.2 was declared NPA, leading to the State Bank of India filing two O.As in the Debt Recovery Tribunal to recover a debt of 50 Crores. The Tribunal later held that the O.As were not maintainable. Issue 2: Remand by Gujarat High Court and subsequent Special Leave Petition dismissal Special Civil Application Nos. 10621-10622 were filed before the Gujarat High Court against the Tribunal's judgment, resulting in the High Court remanding the matter. A Special Leave Petition was dismissed thereafter on 25.03.2017. Issue 3: Application under Insolvency and Bankruptcy Code - Interpretation of limitation period Respondent No.1 initiated a new proceeding under the Insolvency and Bankruptcy Code to recover the debt, which had increased to 124 Crores. The NCLT applied Article 62 of the Limitation Act to determine the limitation period. Issue 4: Applicability of Limitation Act - Article 62 vs. Article 137 The appellant argued that Article 137 of the Limitation Act should apply, making the Section 7 application time-barred. The respondent contended that Article 62 was applicable, emphasizing the commercial interpretation for the Code's functionality. Issue 5: Arguments regarding limitation period by counsels The appellant referenced a previous judgment to support Article 137's application, while the respondent stressed the NCLT's decision and the commercial aspect of the Code. Issue 6: Interpretation of Limitation Act for Section 7 application The Court determined that Article 62 did not apply as it pertained to suits, and Article 137 was the relevant provision. The application was deemed time-barred from the date of default. Issue 7: Decision on the appeal and setting aside judgments of NCLT and NCLAT The Court allowed the appeal, setting aside the judgments of the NCLT and NCLAT. It emphasized the strict application of limitation periods under the law, disregarding equity considerations.
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