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TMI Blog2020 (7) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... ereof have extended the limitation as each of these has the effect of giving a fresh lease of life to the liability with fresh period of limitation commencing from such acknowledgment in writing having been made within limitation period, OTS followed by settlement agreement and part payments made on two occasions in pursuance thereof. Admittedly, application under Section 7 of the 'I B Code' has been filed within three years of the last part payment of ₹ 1.5 Crore approx. effected on 9th February, 2017. This factual position emerging from documentary evidence on record stares in the face of the Appellant who has preferred the appeal without substantial grounds - Appeal is dismissed. - Company Appeal (AT) (Insolvency) No. 1073 of 2019 - - - Dated:- 22-5-2020 - Bansi Lal Bhat And Venugopal M., Judicial Member, V.P. Singh, Technical Member For the Appellant : Ramesh K. Mishra and Manasvi Thapar, Adv. For the Respondent : Amit Singh Chadha, Sr. Adv. R.P. Aggarwal, Ms. Srishti Govil, Sahil Mongia and Nitish Kumar, Adv. JUDGMENT BANSI LAL BHAT, JUDICIAL MEMBER 1. The limited question involved in this appeal is whether the application und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ember, 2015 amount to acknowledgment under section 18 of the Limitation Act, 1963 and even if such document is assumed to have the character of acknowledgment of debt on the part of the 'Corporate Debtor', such acknowledgment and payment of ₹ 1,47,50,000/- made in pursuance of OTS having been made after the expiry of limitation period would not extend the period of limitation as the claim of the 'Financial Creditor' would be barred by limitation. It is worth mentioning that the Appellant has not disputed any document or communication inter se the parties including the letter dated 20th August, 2014 filed by the 'Financial Creditor'. It is thus evident that making of part payment on 5th December, 2015 and 31stMarch, 2016 alluded to by the 'Financial Creditor' in its affidavit dated 24th October, 2019 as having been effected in pursuance of the OTS dated 02nd December, 2015, is not disputed, rebutted or controverted by the 'Corporate Debtor', who harps on the tune of the application under section 7 being hit by limitation on the plea that such documents had been executed after the expiry of period of limitation. 5. Per contra, it is su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttled that an application under section 7 of the 'I B Code' is governed by Article 137 of the Limitation Act, 1963 prescribing three years' time for triggering of the 'Corporate Insolvency Resolution Process' and such period of limitation is to commence from the date the financial debt is declared as NPA. Reference in this regard may be made to the dictum of law laid down by the Hon'ble Apex Court in Gaurav Hargovindbhai Dave v. Asset Reconstruction Company (India) Ltd. Ors.- [2019] 10 Supreme Court Cases 572 . Section 3 of the Limitation Act, 1963 dealing with bar of limitation inter alia provides that every application made after the prescribed period shall be dismissed, although limitation has not been set up as a defence. This general Rule has been subjected to the provisions contained in Sections 4 to 24 of the Limitation Act, 1963 dealing with extension and exclusion of time in certain eventualities and effect of acknowledgment in writing and effect of payment on account of debt or of interest on legacy made before expiration of prescribed period. Sections 18 and 19 of the Limitation Act, 1963, relevant for disposal of this appeal are reproduced her ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owledgment of liability in respect of a right made in writing and signed by the debtor before expiration of prescribed period for a suit or an application would result in a fresh period of limitation being computed from the time when acknowledgment was so signed. It is abundantly clear that such acknowledgment of liability must be made by the debtor in writing and signed by him before the expiration of prescribed period of limitation. Interpreting this provision in Hiralal v. Badkulal reported in AIR 1953 SC 225 , the Hon'ble Apex Court held that an unqualified acknowledgment of liability by a party not only saves the period of limitation but also gives a cause of action to the plaintiff to base its claim. Same principle was reiterated in Syndicate Bank v. R. Veeranna and Ors. reported in [2003] 2 SCC 15 . Again in J.C. Budhraja v. Orissa Mining Corporation Ltd. Anr. reported in [2008] 2 SCC 444 , the Hon'ble Apex Court held as under: 21. It is now well settled that a writing to be an acknowledgement of liability must involve an admission of a subsisting jural relationship between the parties and a conscious affirmation of an intention of continuing such relationsh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s was paid by the 'Corporate Debtor' on 5th December, 2015. This is in the nature of part payment made within three years from the date of Settlement which itself is within the period of limitation of three years as acknowledgment of liability made before expiry of period of limitation computed from the date of declaration of the financial debt as NPA. Subsequently, an amount of ₹ 1 Crore was paid by the 'Corporate Debtor' by way of cheque on 31st March, 2016. This is again a part payment made on 31st March, 2016 in pursuance of the Settlement Terms giving further lease of life to period of limitation commencing from 5th December, 2015. It further emerges from record that in terms of letter/ acknowledgment of payment of ₹ 1.5 Crores approximately in terms of OTS by the 'Corporate Debtor' on 9thFebruary, 2017, the limitation period would further commence w.e.f. such date. Acknowledgment has also been made by the 'Corporate Debtor' in its letter dated 19th March, 2018. These two letters are at pages 12 14 of the Additional Affidavit of the 'Financial Creditor'. It is, therefore, abundantly clear that the acknowledgment in the form ..... X X X X Extracts X X X X X X X X Extracts X X X X
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