9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (12) TMI 915 - AT - Insolvency and BankruptcyMaintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - NPA - Existence of debt and dispute or not - HELD THAT - The 1st Respondent Bank filed an application before the Adjudicating Authority under Section 7 of the I B Code, 2016 seeking Initiation of Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor for the reason that the Corporate Debtor defaulted re-payment of Rs.218,14,20,222.95. From the perusal of Part-IV of the Application under Column-1, it is stated that the Financial Creditor had granted certain term loan and working capital facilities to the Corporate Debtor from time to time and restructured on the terms and conditions as per the sanctioned letter dated 25.03.2015 and the MRA dated 30.03.2015. The Corporate Debtor contested the matter by filing a reply affidavit taking the similar stand as taken in the present appeal stating that the Application under Section 7 of I B Code, 2016 is barred by limitation on the ground that the occurrence of NPA dated 27.05.2015 and Section 7 Application filed on 17.05.2018 which is beyond 3 years and is not permissible under the law of limitation as held by the Hon ble Supreme Court. Further, the Appellant taken the stand before the Adjudicating Authority that the alleged amount claimed by the Bank is not due and payable. From the perusal of the documents, it establishes the existence of debt and a default occurred in non-payment of debt due to the Bank. Further, it is also evident from the recall notice dated 01.02.2016 that the Bank demanded the payment of Rs.174.61 crores which there is no denial or dispute with regard to existence of debt. The Adjudicating Authority clearly observed that there is a debt and default in repayment by the Corporate Debtor. The argument of the Appellant that the Bank has issued a recall notice dated 01.02.2016 thereby the MRA has been revoked is concerned, this Tribunal is of the view that there is ample evidence with regard to the debt and default from the documents filed by the Banks such as the entries in a Banker s Book in accordance with Bankers Book Evidence Act, and recall notice itself establishes that there is a debt and default. The Application under Section 7 can be initiated when a default has occurred and there is no such provision that the occurrence of default can be taken into account from the date of NPA. The argument of the Appellant is negated with respect to the contention that the date of NPA is to be treated as date of default. In this regard, the word default has been defined under Section 3(12) of the I B Code, 2016 means a non-payment of debt when whole or any part or instalment of the amount of debt has become due and payable and is not paid by the debtor or the Corporate Debtor, as the case may be. Section 18 of the Limitation Act, 1963 is applicable to Section 7 Applications under I B Code and held that the acknowledgment of debt by a borrower initiates a fresh period of limitation from the date of acknowledgement of debt - the documents as relied upon by the Respondent Bank is sufficient to establish that there is debt and default and the Adjudicating Authority having satisfied that there exists a debt and default and is incompliance with the provisions of law as encapsulated under Section 7 of the I B Code. There is no error and illegality in the order passed by the Adjudicating Authority. This Tribunal comes to an irresistible and inescapable conclusion that order passed by the Adjudicating Authority dated 12.08.2022 need no interference - Appeal dismissed.
Issues Involved:
1. Whether the application under Section 7 of the I&B Code, 2016 is barred by the law of limitation. 2. Whether the date of default should be considered as the date of NPA or the dates mentioned in the application. 3. Whether the existence of debt and default has been sufficiently established by the Respondent Bank. Issue-wise Detailed Analysis: 1. Barred by Law of Limitation: The Appellant argued that the application under Section 7 of the I&B Code, 2016, filed on 17.05.2018, is barred by the law of limitation because the date of default should be considered as 27.03.2015, the date when the account was declared NPA. The Respondent Bank contended that the application was within the three-year period from the dates of default mentioned in the application, which are under the MRA and Supplemental WC Agreement. The Tribunal concluded that the application is within the limitation period, as the dates of default mentioned in the application are valid and the acknowledgment of debt extends the limitation period as per Section 18 of the Limitation Act, 1963. 2. Date of Default: The Appellant claimed that the date of NPA (27.03.2015) should be considered as the date of default. The Respondent Bank argued that the classification of an account as NPA is irrelevant for the initiation of CIRP under the Code, and the date of default should be as per the new repayment schedule under the restructuring documents (MRA and Supplemental WC Agreement). The Tribunal affirmed that the date of default is crucial for initiating CIRP and not the date of NPA. The Tribunal relied on the Supreme Court's decision in Laxmipat Surana Vs. Union Bank of India, which held that the date of default, not the date of NPA, is to be reckoned for the initiation of CIRP. 3. Existence of Debt and Default: The Respondent Bank provided several documents to establish the existence of debt and default, including the report of CRILC, CIBIL, statement of accounts, recall notice dated 01.02.2016, and the Annual Report for FY 2015-16. The Appellant contested that the amount claimed is not due and payable and that the MRA was revoked. The Tribunal found that the documents provided by the Respondent Bank, including entries in the Bankers Book and the recall notice, sufficiently established the existence of debt and default. The Tribunal also noted that the acknowledgment of debt in the Annual Report extends the limitation period. Conclusion: The Tribunal concluded that the application under Section 7 of the I&B Code, 2016, is within the limitation period and that the existence of debt and default has been sufficiently established by the Respondent Bank. The order passed by the Adjudicating Authority dated 12.08.2022 was upheld, and the appeal was dismissed.
|
