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TMI Blog2019 (11) TMI 1401X X X X Extracts X X X X X X X X Extracts X X X X ..... gly, we reject this claim of the corporate debtor. Non-enforceability of this petition because of reference of winding up being made by BIFR and which is pending for consideration of Hon ble High Court, Calcutta - HELD THAT:- It is noted that no order of the Hon ble High Court has been brought on record to show that winding up order has actually been passed before filing of petition under Sec. 7 of Insolvency Bankruptcy Code, 2016. It is now a settled proposition that mere pendency of a proceedings of win g up before any High Court would not preclude/prevent a creditor to file a petition under Sec. 7 of Insolvency Bankruptcy Code, 2016, hence, this contention of the corporate debtor is also rejected as provision of Sec. 11 (d) of Insolvency Bankruptcy Code, 2016 do not come into play in the present case. 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, Ispat Profiles India Limited is hereby admitted - Moratorium declared. - CP (IB) No.1400/KB/2018 - - - Dated:- 28-11-2019 - Madan B Gosavi, Member (J) And Virender Kumar Gupta M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued in lieu of payment of instalments due between 31/3/ 1997 and 31/3/1998. 4. On 12/4/ 1999 IDBI issued a letter agreeing in principle to reschedule the instalment of NCDs and for redemption of ZRDs by issue of fresh NCDs of equivalent value on agreed terms and conditions. As per the agreed terms and conditions, corporate debtor was obliged to repay the outstanding sum in three annual instalment commencing from 31/3/2001 to 31/3/2004. Further, NCDs amounting to ₹ 2732 lakh were also due for redemption on the said dates. The corporate debtor informed this development to IFCI. 5. On 30/9/2001 corporate debtor filed a reference before the BIFR under the provisions of Sick Industrial Companies (Special Provisions) Act, 1985 [SICA] informing that its net worth had turned negative in the year 2000. This reference was dismissed. Against such dismissal, corporate debtor filed an appeal before Appellate Authority for Industrial Financial Reconstruction (AAIFR ) and also filed fresh reference before BIFR. Appellate Authority for Industrial Financial Reconstruction (AAIFR) remitted the matter back to BIFR for further consideration. 6.BIFR on 30/3/2006 declared corpora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nted to acknowledgment of liability under Sec. 18 of Limitation Act, 1963. Ld. Sr. Counsel further pleaded that it also amounted to enforceable promise to pay under Sec.25 (3) of the Indian Contract Act. 10. Ld. Sr. Counsel further contended that NCDs amounting to ₹ 4098 lakh were due of redemption by the corporate debtor on 31/3/2002, 31/3/2003 and 31/3/2004. It was further contended that date of default in the instant matter was 3 /3/2004. Ld. Sr. Counsel further contended that from time to time starting from 5/7/2005 till 26/4/2016 there were several correspondences, claims/ admission by the corporate debtor either in proceedings before the BIFR and/or AAIFR or otherwise which constituted acknowledgment of debt in terms of Sec. 18 of Limitation Act, 1963 and a promise to pay under Sec.25 (3) of India contract Act, 1872. 11. Ld. Sr. Counsel further emphasized on the fact that corporate debtor submitted an application under Sec.391 of the Companies Act, 1956 on 26/4/2016 by way of affidavit affirmed by one of its Directors and submitted a rehabilitation scheme wherein financial creditor had been admitted as a creditor of the corporate debtor. It was also submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne 1239. Thereafter, Ld. Sr. Counsel referred to the provisions of Sec.22 of SICA and contended that proceedings of winding up were pending before Hon ble High Court as per the reference of BIFR, hence, present application was not maintainable. 14 In the rejoinder, Ld. Counsel contended that debt was not barred by Limitation in view of various renewals, occasions, conversions, revival/ rehabilitation scheme proposed from time to time. It was ultimately contended that there existed continuous cause of action, hence, both debt as well as petition was not barred by limitation. 15. Ld. Sr. Counsel further placed reliance on the decision of the Hon ble Supreme Court in the case of Jaipur Metals and Electricals Employees Organisation vs. Jaipur Metals and Electricals Limited (2019) 4 Supreme Court Cases 227 and referred to para 19 of the said order for the proposition that before any winding up order had been passed, petition filed under Sec. 7 was maintainable, hence, mere pendency of reference by BIFR before Hon ble High Court was not a limiting factor. 16. We have considered the submission made by both the sides and have also perused the materials on record. It is noted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 18 of Limitation Act, 1963. It has been claimed so far the reason that the said e-mail was addressed to Baba Gora Transport not to the Financial Creditor. On perusal of the records, it is noted that the said e-mail is, in fact, has been addressed to mail ID [email protected] which is not of the Financial Creditor 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Eletronics Limited vs. McNally Bharat Engineering Co. Limited in CP (IB) No. 1506/KB/2018 Order dated 16/10/2019, this Tribunal has held as under:- 5. We have considered submissions made by both sides and have also perused the materials on record. The question for our consideration arises is that (i) whether debt is barred by limitation or not; (ii) whether the letters dated 29/1/2018 and 30/7/2018 constitute acknowledgment 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 light 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 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 acknowledgment of debt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been sent on 29/1/2018 and 30/7/2018 respectively which are beyond three years period from 30/ 9/2014, hence, whether requirement of Sec. 18(1) of Limitation Act, 1963 is complied with. To look into this aspect, we have to see whether presentation in the balance sheet by itself constitutes an acknowledgment 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 conformation of balance from the financial creditor as on 31 st 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 31 st March 2015, 31 st March 2016 and 31 st 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 period specified for filing of suit as per provisions of Limitation Act, 1963 and, therefore, thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and any provision of Limitation Act, 1963 being inconsistent to the provisions of Insolvency Bankruptcy Code, 2016 will not be applicable. Further, the technicalities of Limitation Act, 1963 would not be applicable as Insolvency Bankruptcy Code, 2016 is an economic legislation and functions on the principles of summary 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 acknowledgment 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 to the term claim in Sec.3(6) of the Insolvency Bankruptcy Code, 2016 which includes right to payment even on equitable ground. 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 acknowledgment within the meaning of provision of Sec. 18 of Limitation Act, 1963. Accordingly, we reject the same. 19. In the case of Asset Reconstruction Company (India) Ltd. vs. Dagcon (India) Private ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... argovindbhai Dave (supra) is not applicable in the facts and circumstances of the case, hence, it also does not help the cause of the corporate debtor. 23. As regards non enforce-ability of this petition because of reference of winding up being made by BIFR and which is pending for consideration of Hon ble High Court, Calcutta, it is noted that no order of the Hon ble High Court has been brought on record to show that winding up order has actually been passed before filing of petition under Sec. 7 of Insolvency Bankruptcy Code, 2016. It is now a settled proposition that mere pendency of a proceedings of win g up before any High Court would not preclude/prevent a creditor to file a petition under Sec. 7 of Insolvency Bankruptcy Code, 2016, hence, this contention of the corporate debtor is also rejected as provision of Sec. 11 (d) of Insolvency Bankruptcy Code, 2016 do not come into play in the present case. 24. It has been pleaded that no date of default has been mentioned in Part IV of the Form 1, hence, the application was defective. However, on perusal of column 4 at page 6 of the Paaper Book, it is noted that a specific mention has been made in regard to the partic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s assets or any legal right or beneficial interest therein; c) Any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002); d) The recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor. v. The supply of essential goods or services to the corporate debtor as may be specified shall not be terminated, suspended, or interrupted during moratorium period. vi. The provisions of sub-section (1) shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator. vii. The order of moratorium shall have effect from the date of admission till the completion of the corporate insolvency resolution process. viii. Provided that where at any time during the corporate insolvency resolution process period, if the Adjudicating Authority approves the resolution plan under sub-section (1) of Section 31 or passes an order for liqui ..... X X X X Extracts X X X X X X X X Extracts X X X X
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