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TMI Blog2019 (12) TMI 1297X X X X Extracts X X X X X X X X Extracts X X X X ..... into continuation/ extension of limitation period before the expiry of the original limitation period. In this regard, the presentation of outstanding loan in the financial statements for the year ended on 31st March, 2016 which also depict the figures of the same as on 31 st March,2015 is continuation of such outstanding loan from the earlier financial years as in such a case no other conclusion can be arrived i.e. the outstanding loan continues from earlier years except the figure of the same which may vary due to interest, if any, charged subsequently or due to repayment of loan, if any. There are no merits in the contention of the Corporate debtor that there exists some dispute and it was a case of non performance for the reason that even a disputed claim can be considered for the purpose of section 7 so long, there is debt which is due and payable and a default has occurred in payment thereof. In the present case, it is not in dispute that undisputed claim remains more than Rs. One Lakh, hence, CIRP can be initiated. Thus, this claim of the corporate debtor is also rejected - The petition is otherwise complete in all respects and defect free - The name of the IRP has al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditor was not barred by limitation. On query from the bench regarding presentation of outstanding amount in earlier years, the Ld. Senior Counsel fairly submitted that if required balance-sheets for earlier years could be produced. 4. The learned Sr. Counsel appearing on behalf of the Corporate Debtor submitted that debts were due and payable in 2012 on the face it but in sum and substance it fell due on 12.01.2010. In this regard, he drew our attention to page 372 to 375 Annexure 'O' show that loan had been forclosed. He, thereafter, drew our attention to page 382 to 392 and Annexure-Q of the paper book to show that on 29.11.2010 the Bank in letter through its advocate had itself stated that amount loan had been forclosed and the agreement had been terminated. It was strenuously argued that there was no admission or acknowledgement or any repayment by the Corporate Debtor thereafter and no record to this effect were also prpduced by the Financial Creditor, hence, it was an open and shut case on account of limitation as aforesaid loan became time barred on 10.09.2013 and 29.11.2013. Thereafter, he drew our attention to page 85 and 103 of the Paper Book to show that as pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of the Hon'ble Supreme Court, the learned counsel submitted that there was no admission or acknowledgement of debt which could be inferred from any document on record and in particular, the balance-sheet could not be considered as acknowledgement of debt. 7. In the Rejoinder, the Ld. Senior counsel, drew our attention to page 2 at serial no. 15 to show that demand promissory note had been issued on 30.3.2009. He also drew our attention to pages 292 to 296 containing details of cheques of EMI presented by the Bank, which got dishonoured and on this basis, it was pleaded that cheques were received but dishonoured, however, this factual position indicated the intention of the corporate debtor to make the payments otherwise the Corporate Debtor could cancelled or recalled the cheques or issued instructions to the Banker not to encash the same which had not been done. He contended that last cheque was received and bounced in December 2012. Thereafter, he drew our attention to page 480 of the paper book once again to show that outstanding amount payable was also appearing in the column of previous year figures i.e. 31st March, 2015. On the basis of this sequence of events, he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd, it is noted that in the financial statements for the year ended 31st March, 2016, the amount of secured loan has been shown. The fact of default has also been mentioned. The said balance-sheet also contain figures of such loan in financial year ended on 31 st March, 2015. It has been also noted that in financial year 2011-12 and 2012-13 cheuqes given by the Corporate Debtor as EMI have been presented by the Bank which have got dishonoured. Such cheques were neither recalled nor any instructions had been issued as regard to cancellation/ non encashment. The Financial creditor has also produced the demand promissory note and other documents to establish the fact of continuation of limitation till December, 2012. Thus, a prima facie case of a alive claim has been established. Various arguments have been made regarding what would constitute acknowledgement and how it is to be determine/ ascertained. In this regard, we state that these issues have come up before us in number of petitions. As recently as, in the case of Stressed Assets Stabilization Fund Vs Ispat Profiles India Limited in C.P. (1B) No. 1400/ KB/ 2018 order dated November 28, 2019, this bench has dealt with these asp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reditor but statement of account of Financial Creditor has been attached. To express our view about the validity of such e-mail is an acknowledgement of that we consider it necessary to reproduce Section 18 of the Limitation Act, 1963 as under: Section 18(1): Where, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgement of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from time when the acknowledgement was so signed. Section 18(2): Where the writing containing the acknowledgement is undated, oral evidence may be given Of the time when it was signed;but subject to the provisions Of the Indian Evidence Act, 1872 (a of 1872), oral evidence of its contents shall not be received. Explanation: for the purpose of this section, - (a) an acknowledgement may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment, delivery, performance or e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... barred by limitation or not; (ii) whether the letters dated 29/1/2018 and 30/7/2018 constitute acknowledgement as per provision of Sec. 18 of the Limitation Act, 1963. It is not in dispute that these letters have been written by the corporate debtor regarding confirmation of outstanding balance of ICD as on 31/ 12/2017 and 30/6/2018 as per the books of account of Financial Creditor. The confirmation of outstanding balance is to be given to the statutory auditors of the corporate debtor. This exercise cannot be considered in a tight manner because reliance on the accuracy of the books of account and financial statement is based upon such standard auditing practice. In the letter dated 29/ 1/2018 it has been clearly mentioned that such confirmation was in respect of amounts payable in respect ICD as on 31/12/2017 which by itself establishes the fact of acknowledgement of debt beyond any doubt. To deal with the contention of the corporate debtor that such emails do not constitute acknowledgement of debt within the meaning of provision of Sec. 18 of the Limitation Act, 1963, we consider it necessary to reproduce the Sec. 18 of the said Act as under:- Effect of acknowledgement in wr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dgment Of debt or not. Now, there have been catena of decisions of NCLT and NCLAT that presentation of debt in the balance sheet constitutes acknowledgment of debt. Since the corporate debtor, in the present case has asked for confonnation of balance from the financial creditor as on 31st December 2017 and 30th June 2016 in respect of loan taken in 2014 which itself implies that such loan is continuously outstanding in the balance sheet of corporate debtor from earlier financial years ending on 31st March 2015, 31st March 2016 and 31st March 2017. Thus, this fact by itself goes against the corporate debtor and irrespective of these emails, there exists acknowledgment of debt due and payable which is not barred by limitation. This being so, hence, such emails also fall in the penod specified for filing of suit as per provisions of Limitation Act, 1963 and, therefore, these comply with the requirements of Sec. 18 of Limitation Act, 1963. 7. In the. case of Jignesh Shah another, Hon'ble Supreme Court in the order dated 25th September 2019 at para 19 of the order has held as under:- 19. The aforesaid judgments correctly hold that a suit for recovery based upon a cause of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmary procedure. As discussed earlier that explanation (a) of Sec. 18 of Limitation Act. 1963 provides much flexibility and takes into consideration various factors/situations for explaining as to what would constitute acknowledgement and in view of Sec.238 and 238A of the Insolvency Bankruptcy Code. 2016. such provision has to be read further in conjunction with the wider meaning given the term claim in Sec. 3(6) of the Insolvency Bankruptcy Code 2016 which includes right to payment even on equitable ground. ( Emphasis supplied). 10. In view of above discussion, we hold that there is no merit in the claim of the corporate debtor that the said emails cannot be said to be an acknowledgement within the meaning of provision of Sec. 18 of Limitation Act, 1963. Accordingly, we reject the same. 20. In the case of Asset Reconstruction Company (India) Ltd. vs. Dagcon (India) Private Limited, Order dated 20/ 11/2019 in CP(IB) NO. 1198/ KB/ 2018, the Tribunal has held as under:- 11. Coming to the aspect of limitation, we are of the view if averment made before a court of law or any statutory authority cannot be constituted as an acknowledgment of debt then that would render ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no debt was due and payable for the reason that such action is required as per the guidelines Of the RBI as well as the Bank itself and such unilateral action can not result into waiver of loan or in any way lead to a conclusion that debt is extinguished by financial creditor and no claim is to be made by the financial creditor in accordance with law. This view is further fortified by the fact that financial creditor in spite of writing it off have perused various legal options to realise the same and even petition under section 434 of Companies Act, 2013 had been filed. Further, the default Of this debt has been shown in the Balance-sheet of Corporate Debtor which by itself negates this plea of Corporate Debtor. Similar is our view on the aspect of for-closure raised by the Corporate Debtor. In this regard, we are further of the view that the definition of the term claim as given in section 3(6) of IBC 2016 covers the liability to pay debt on equitable ground. Further, this definition also negates the claim of the Corporate Debtor that the agreement had expired. For such view, we further find support from the observations of the Honble Supreme court in the case of Pioneer Urban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gislation which deals with economic matters and, in the large sense, deals with the economy of the country as a whole. Earlier experiments, as we have seen, in terms of legislations having failed, 'trial' having led to repeated 'errors' ultimately led to the enactment ofthe Code. The experiment contained in the Code, judged by the generality of its provisions and not by so-called creditors and inequities that have been pointed out by the petitioners, passes constitutional muster. To stay experimentation in things economic is a grave responsibility, and denial of the right to experiment is fraught with serious consequences to the nation. We have also seen that the working of the Code is being monitored by the Central Government by Expert Committees that have been set up in this behalf. Amendments have been made in the short period in which the Code has operated, both to the Code itself as well as to subordinate legislation made under it. This process is an ongoing process which involves all stakeholders, including the petitioners 13. In the case relied on by the Corporate Debtor, there is no issue is involved as to whether presentation in the balance sheet constit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en proposed who has given his consent and it has been claimed that no disciplinary proceedings are pending against him.Accordingly, we approve his name. 17. We admit this petition and order as under:- ORDER i. The application filed by the Financial Creditor under section 7 of the Insolvency Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process against the Corporate Debtor, namely M/S Sri Balaji Metals and Minerals Pvt. Ltd is hereby admitted. ii. We declare a moratorium and public announcement in accordance with Sections 13 and 15 of the IBC, 2016. iii. Moratorium is declared for the purposes referred to in Section 14 of the Insolvency Bankruptcy Code, 2016. The IRP shall cause a public announcement of the initiation of Corporate Insolvency Resplution Process and call for the submission of claims under Section 15. The public announcement referred to in clause (b) of sub-section (I) of Section 15 of Insolvency Bankruptcy Code, 2016 shall be made immediately. iv. Moratorium under Section 14 of the Insolvency Bankruptcy Code, 2016 prohibits the following: a) The institution of suits or continuation of pending suits or proceedings aga ..... X X X X Extracts X X X X X X X X Extracts X X X X
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