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TMI Blog2020 (6) TMI 557X X X X Extracts X X X X X X X X Extracts X X X X ..... does not make a difference, for the purposes of provisions of I B Code. We further reject the submission that because in Section 3(10) of I B Code in definition of Creditor the decree holder is included it shows that decree gives cause to initiate application under Section 7 of I B Code. Section 3 is in Part I of I B Code. Part II of I B Code deals with Insolvency Resolution And Liquidation For Corporate Person , has its own set of definitions in Section 5. Section 3 (10) definition of Creditor includes financial creditor , operational creditor decree-holder etc. But Section 7 or Section 9 dealing with Financial Creditor and operational creditor do not include decree-holder to initiate CIRP in Part II. The impugned order passed by Adjudicating Authority is set aside and the Application under Section 7 of I B Code filed by the Respondent is dismissed - appeal allowed. - CO. APPEAL (AT) (INSOLVENCY) NO. 1379 OF 2019 - - - Dated:- 5-3-2020 - A.I.S. Cheema, Judicial Member And Kanthi Narahari, Technical Member For the Appellant : Krishnendu Dutta, Sunil Mund, Rahul Gupta and S. Patra, Advs. For the Respondent : Ramji Srinivasan, Sr. Adv. and Is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated that the Account had become NPA on 30th June, 2013. The Appellant claims that the Original Application came to be filed before DRT on 30th September, 2013. The Corporate Debtor had contested the notice under Section 13(2) of the SARFAESI Act and still the Bank went ahead to file Original Application No. 225 of 2013 and the order passed by DRT is ex parte. The application filed under Section 7 of I B Code dated 17th January, 2019 is time barred keeping in view, the date of NPA dated 30th June, 2013. 5. The Learned Counsel for the Appellant has referred to Judgment in the matter of Sh G Eswara Rao v. Stressed Assets Stabilisation fund , Company Appeal (AT) Insolvency No. 1097 of 2019 dated 07th February, 2020 and has submitted that the Application under Section 7 of I B Code is required to be filed within 3 years of Account becoming NPA. It is stated that the Application filed on the basis of order of DRT OA No. 225/2013 cannot save limitation with regard to Account which had become NPA on 30th June, 2013. The Learned Counsel referring to the judgement in the matter of Sh G Eswara Rao (Supra) stated that the other Hon'ble Bench of this Tribunal has specifically consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra) also. It was noted that in view of the Judgments of Hon'ble Supreme Court, for Application under Section 7 of the Code, Article 137 of Limitation Act 1963 will apply. After reference to the Judgments, it was observed by this Tribunal in Sh G Eswara Rao (Para 24) as under: 24. In the present case, the 'Corporate Debtor' defaulted to pay prior to 2004, due to which O.A. No. 193 of2004 was filed by Respondent ('Financial Creditor'). A Decree passed by the Debts Recovery Tribunal or any suit cannot shift forward the date of default. On the other hand, the judgment and Decree passed by Debts Recovery Tribunal on 17th August, 2018, only suggests that debt become due and payable. It does not shifting forward the date of default as Decree has to be executed within a specified period. It is not that after passing of judgment or Decree, the default takes place immediately, as recovery is permissible, all the debits in terms of judgment and Decree dated 17th August, 2018 with pendent lite and. future interest at the rate of 12% per annum could have been executed only through an execution case . 8. Thereafter, in Sh G Eswara Rao reference was made to judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Appellant's rights as a result of which the limitation had begun ticking. Learned Senior Counsel is suggesting that the Judgment holds that limitation will start running from the date of Recovery Certificate for application under Section 7 of I B Code. It is stated that Section 3(10) of I B Code shows that Creditor includes a decree-holder . 11. We do not agree with this submission of the Ld. Senior Counsel for Respondent. To understand, it would be appropriate to reproduce the judgment of the Hon'ble Supreme Court in the matter of Vashdeo R. Bhojwani (Supra) which is not very long: 1. In the facts of the present case, at the relevant time, a default of ₹ 6.7 Crores was found as against the Respondent No. 2. The Respondent No. 2 had been declared a NPA by Abhyudaya Co-operative Bank Limited on 23.12.1999. Ultimately, a Recovery Certificate dated 24.12.2001 was issued for this amount. A Section 7 petition was filed by the Respondent No. 1 on 21.07.2017 before the NCLT claiming that this amount together with interest, which kept ticking from 1998, was payable to the respondent as the loan granted to Respondent No. 2 had originally been assigned, and, tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resulting from the act may continue. If, however, a wrongful act is of such a character that the injury caused by it itself continues then the act constitutes a continuing wrong. In this connection it is necessary to draw a distinction between the injury caused by the wrongful act and what may be described as the effect of the said injury. It is only in regard to acts which can be properly characterized as continuing wrongs that S. 23 can be invoked. Thus considered it is difficult to hold that the trustees, act in denying altogether the alleged rights of the Guravs as hereditary worshippers and in claiming and obtaining possession from them by their suit in 1922 was a continuing wrong. The decree obtained by the trustees in the said litigation had injured effectively and completely the appellants' rights though the damage caused by the said decree subsequently continued..... Following this judgment, it is clear that when the Recovery Certificate dated 24.12.2001 was issued, this Certificate injured effectively and completely the appellant's rights as a result of which limitation would have begun ticking. 5. This being the case, and the claim in the present suit be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation Act 1908 read as under: 23. Continuing breaches and wrongs. In the case of a continuing breach of contract and in the case of a continuing wrong independent of contract, a fresh period of limitation begins to run at every moment of the time during which the brea.ch or the wrong, as the case may be, continues. Article 120 of Limitation Act 1908 read as under: THE FIRST SCHEDULE. - contd. FIRST DIVISION: SUITS-contd. Description of suit. Period of limitation. Time from which period beings to run. 120. Suit for which no period of limitation is provided elsewhere in this schedule. 1 [Six years] When the right to sue accrues. 14. Keeping above provisions in view helps understand the context for para 31 of that Judgment, we refer to Para 31 from the judgment of Balakrishna Savalram Pujari which reads as under: 31. It is then contended by Mr. Rege that the suits cannot be held to be barred under Article 120 because Section 23 of the Limitation Act applies; and since, in the words of the said section, the conduct of the trustees amounted to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the right is complete at the date of the ouster and so there would be no scope for the application of 23 in such a case. That is the view which the High Court has taken and we see no reason to differ from it . 15. It is clear that in that matter, the Appellants tried to claim that there was continuing wrong and the Hon'ble Supreme Court had found that the Decree obtained by the Trustees in the litigation had injured effectively and completely the rights of the Appellants therein even if the damage continued subsequently. 16. Para 1 of the judgment in the matter of Vashdevo R. Bhojwani (Supra) Hon'ble Supreme Court shows that the Application filed by the Respondent Bank under Section 7 claimed that the amount together with interest kept ticking from 1998. The last part of Para 4 of the judgment is required to be read keeping this, in view. The Perusal of the judgment shows that Hon'ble Supreme Court did not accept that cause of action in that matter was continuing and no limitation period would attach which was the basis for holding claim to be within limitation in NCLT NCLAT. Both the Judgments of NCLT NCLAT were set aside. Hon'ble Supreme Court rather ..... X X X X Extracts X X X X X X X X Extracts X X X X
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