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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 ..... default in discharge of liability in respect of financial debt to the tune of Rs. 44,51,74,964/- came to be admitted in terms of the impugned order dated 25th July, 2019 passed by the Adjudicating Authority (National Company Law Tribunal), Ahmedabad Bench, Ahmedabad which is primarily challenged on the ground that the application is barred by limitation. For understanding the controversy raised in appeal, it would be appropriate to advert to the factual matrix of the case in brief. 3. The 'Corporate Debtor' approached the Bank of Baroda in 2011 to extend credit facilities for promoting its business. The said Bank sanctioned loan in the form of Cash Credit, Letter of Credit and various Term Loan Facilities amounting to Rs. 14.80 Crores to the 'Corporate Debtor' vide Sanction Letter dated 6th January, 2011. The loan was secured by executing various documents by the 'Corporate Debtor'. However, the 'Corporate Debtor' failed to repay the loan amount despite demand by the 'Financial Creditor'. The 'Corporate Debtor' executed letters of continuing security/revival letters dated 18th January, 2011 and 11th May, 2012 as also letters acknowl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 9.5 Crores. It is submitted that this was followed by another acknowledgment of liability in the nature of Settlement Terms agreed upon inter se the parties on 02nd December, 2015 and payment of Rs. 47.50 lakhs was made in pursuance of such Settlement Terms on 05th December, 2015, further followed by deposit of Rs. 1 Crore by way of cheque with further payment of Rs. 1.5 Crore on 09th February, 2017, thereby giving fresh lease of life to the claim on account of financial debt with limitation commencing from 09thFebruary, 2017. Reference is also made to another letter emanating from 'Corporate Debtor' on 19th March, 2018. It is further submitted that the application under section 7 of the 'I&B Code' was filed on 16thAugust, 2018 i.e. within three years from the last acknowledgment of debt as also from the date of part payment having been made by the 'Corporate Debtor'. Thus, the plea of limitation raised by the Appellant has no substance. 6. After hearing learned counsel for the parties and rummaging through the record, we find that the facts with regard to advancement of loan facility by the 'Bank of Baroda' to the 'Corporate Debtor' an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... containing the acknowledgment 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 (1 of 1872), oral evidence of its contents shall not be received. Explanation.-For the purposes of this section,- (a) an acknowledgment 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 enjoyment has not yet come or is accompanied by a refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to set off, or is addressed to a person other than a person entitled to the property or right, (b) the word "signed" means signed either personally or by an agent duly authorised in this behalf, and (c) an application for the execution of a decree or order shall not be deemed to be an application in respect of any property or right." "19. Effect of payment on account of debt or of interest on legacy.-Where payment on account of a debt or of interest on a legacy is made before the expiration of the prescribed period by the person liable to pay the debt or legacy or by his agent duly authorised in this be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dmit his intention to pay the debt................ What can be acknowledged is a present subsisting liability. An acknowledgment made with reference to a liability, cannot extend limitation for a time barred liability or a claim that was not made at the time of acknowledgment or some other liability relating to other transactions. Any admission of jural relationship in regard to the ascertained sum due or a pending claim, cannot be an acknowledgement for a new additional claim for damages." It is manifestly clear that the liability acknowledged by the debtor must be a subsisting liability on the date of such acknowledgment. 8. Section 19 of the Limitation Act, 1963 gets attracted if two conditions are satisfied: (a) payment must be made within prescribed period of limitation (b) such payment must be acknowledged either by writing of the person making such payment or signed by him. 9. What extends the period of limitation is the payment made and not the writing but since such writing is construed as a mode of proof of such payment, such acknowledgment becomes relevant. This view is fortified by the judgment of the Hon'ble Apex Court rendered in "Shapoor Freedom Mazda v. D ..... X X X X Extracts X X X X X X X X Extracts X X X X
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