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TMI Blog2020 (8) TMI 395X X X X Extracts X X X X X X X X Extracts X X X X ..... he time nor exclude the period of limitation. The limitation commenced from the date of default reckoned on the basis of classification of Corporate Debtor s account as NPA would not admit of any extension or exclusion on the basis of pursuit of a remedy under the SARFAESI Act, 2002 or in a recovery proceedings before the DRT. The date of default computed with effect from the date of account of the Corporate Debtor being classified as NPA would not shift as in the instant case proceedings taken before the DRT for recovery of the financial debt would not be a proceeding being pursued before a wrong forum nor would that be a continuation of the cause of action. The argument advanced on behalf of the Appellant to find fault with the im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned order on the ground that the debt was payable in law as the same had been acknowledged by the Corporate Debtor in its balance-sheet of financial years commencing from 2010 to 2016 which for purpose of Section 18 of the Limitation Act amounted to acknowledgement of liability on the part of the Respondent (Corporate Debtor). After hearing the learned counsel for the Appellant at the pre-admission stage, we find that the Union Bank of India, who was the Appellant s Assignor had filed for recovery of the outstanding financial debt in question before the DRT, Mumbai on 8th February, 2011 for default on the part of the Respondent (Corporate Debtor) which was alleged to have occurred on 20th February, 2010. The DRT allowed the claim of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is no acknowledgement in writing on the part of the Respondent (Corporate Debtor) before the expiry of period of limitation computed from the date of default, it is required to be seen whether reflection of the financial debt in balance-sheet of the Corporate Debtor for the relevant period would amount to such acknowledgement of debt within the purview of Section 18 of the Limitation Act to extend the period of limitation. The issue regarding exclusion and extension of period within the ambit of Limitation Act fell for consideration before this Appellate Tribunal on several occasions. Upon noticing that in Sesh Nath Singh Ors. v. Baidyabati Sheoraphuli Cooperative Bank Ltd. in Company Appeal (AT) (Insolvency) No. 672 of 2019 a thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt for recovery of money by Civil Court/ Debt Recovery Tribunal cannot shift forward the date of default for the purpose of computing the period for filing an application under Section 7 of the I B Code . 21. An action taken by the Financial Creditor under Section 13(2) or Section 13(4) of the SARFAESI Act, 2002 cannot be termed to be a civil proceeding before a Court of first instance or appeal or revision before an Appellate Court and the other forum. Therefore, action taken under Section 13(2) of the SARFAESI Act, 2002 cannot be counted for the purpose of exclusion of the period of limitation under Section 14(2) of the Limitation Act, 1963. In an application under Section 7 relief is sought for resolution of a Corpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liability, it would suffice to refer to the following observations made in majority judgment of the four Member Bench of this Appellate Tribunal in V. Padmakumar v. Stressed Assets Stabilitation Fund (SASF) Anr. Company Appeal (AT) (Insolvency) No. 57 of 2020 decided on 12th March, 2020. Paragraph 22 thereof is reproduced hereunder: 22. In view of the aforesaid findings, agreeing with the decisions aforesaid, at the cost of repetition, we hold: (i) As the filing of Balance Sheet/ Annual Return being mandatory under Section 92(4) of the Companies Act, 2013, failing of which attracts penal action under Section 92(5) (6), the Balance Sheet / Annual Return of the Corporate Debtor cannot be treated to be an acknowledgement u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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