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TMI Blog2020 (8) TMI 609X X X X Extracts X X X X X X X X Extracts X X X X ..... led that a writing to be an acknowledgement of liability must involve an admission of subsisting Jural relationship between the parties and a conscious affirmation of an intention of continuing such relationship in regard to an existing liability. The Admission need not be in regard to any precise amount nor by expressed words. If a defendant writes to the plaintiff requesting him to send his claim for verification of payment it amounts to an acknowledgement. Corporate Debtor has acknowledged the debt within three years i.e, before the expiration of the prescribed period for a suit or application. Thus, the Learned Adjudicating Authority has rightly held that the Application under Section 7 of I B Code is well within limitation - Therefore, no interference is called for in this Appeal. Appeal dismissed. - Company Appeal (AT)(Ins) No. 748 of 2019 - - - Dated:- 24-6-2020 - (Justice Jarat Kumar Jain) Member (Judicial) , (Mr. Balvinder Singh) Member (Technical) And (Dr. Ashok Kumar Mishra) Member (Technical) For the Appellant : Mr. Kaushik. N. Sharma and Mr. Sudhanshu Suman, Advocates For the Respondent : Mr. Kunak Tandon with Ms. Richa, Advocates Mr. K.V.Balakr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount as per One Time Settlement, Hence, vide letter dated 22.11.2017 the financial Creditor has cancelled the One Time Settlement Proposal. Thereafter, Financial Creditor initiated recovery proceedings under Section 19 of the Recovery of Debts and Bankruptcy Act, 1993 and also under SARFAESI Act, 2002 but the proceedings cannot be reached to a logical end. Therefore, the Financial Creditor has filed the application under Section 7 of I B Code, on 15.03.2019. 4. After, hearing the Learned Counsel for the parties the Adjudicating Authority by the impugned order admitted the application to initiated CIRP against the Corporate Debtor and issued Moratorium and appointed Mr. Radha Krishnan Dharamrajan as Interim Resolution Professional. Being aggrieved with this order R.R. Gopaljee promoter and shareholder of the Corporate Debtor Company filed this Appeal. 5. Learned Counsel for the Appellant submitted that the Adjudicating Authority did not observe the principal of Natural Justice and had passed the order for commencement of CIRP in nearly three days without even providing an opportunity to file written submissions or objections on application under Section 7 of I B Code. The App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The person acknowledging must be conscious of his liability and commitment should be made towards that liability. It need not be specific, but if necessary facts which constituted the liability are admitted, an acknowledgement may be inferred from such an admission. In this Case, the reply to notice by Corporate Debtor dated 27.03.2017 does not specify any commitment towards any liability and is merely reply stating certain meetings with the officials of the Financial Creditor, therefore, it cannot be treated as acknowledgement. 9. On the other hand, learned counsel for the Financial Creditor Respondent No. 1 supported the findings of the Adjudicating Authority and submitted that the Application under Section 7 of I B Code, filed on 15.03.2019 and after granting proper opportunity the Adjudicating Authority has passed the order on 05.07.2019. It is admitted fact that Financial Creditor has granted Financial Assistance by way of term loan on different dates and on the date of Application claimed total amount is ₹ 29,96,10,603.01/-. The Corporate Debtor has committed default in repayment, therefore, on 15.03.2017. Financial Creditor has sent a legal notice and in rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Therefore, the question for consideration is whether the Corporate Debtor has acknowledged the debt as per the requirement of under Section 18 of limitation Act, only then, the date of default can be forwarded to a future date as held by this Appellate Tribunal in Sh. G Eswara Rao Vs. Stressed Assets Stabilisation fund [Company Appeal (At) (Ins) No. 1097 of 2019] decided on 07.02.2020. 14. Hon ble Supreme Court in the case of J.C. Budhraja Vs. Chairman, Orissa Mining Corporation Ltd. (2008) 2 SCC 444 held that: 20. Section 18 of the Limitation Act, 1963 deals with effect of acknowledgment in writing. Sub-section (1) thereof provides that where, before the expiration of the prescribed period for a suit or application in respect of any right, an acknowledgment of liability in respect of such right has been made in writing signed by the party against whom such right is claimed, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed. The explanation to the section provides that an acknowledgment may be sufficient though it omits to specify the exact nature of the right or avers that the time for payment has not yet come or is accom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are used and would always be conditioned by the tenor of the said document . 21. It is now well settled that a writing to be an acknowledgment of liability must involve an admission of a subsisting jural relationship between the parties and a conscious affirmation of an intention of continuing such relationship in regard to an existing liability. The admission need not be in regard to any precise amount nor by expressed words. If a defendant writes to the plaintiff requesting him to send his claim for verification and payment, it amounts to an acknowledgment. But if the defendant merely says, without admitting liability, it would like to examine the claim or the accounts, it may not amount to acknowledgment. In other words, a writing, to be treated as an acknowledgment of liability should consciously admit his liability to pay or admit his intention to pay the debt. 15. it is now well settled that a writing to be an acknowledgement of liability must involve an admission of subsisting Jural relationship between the parties and a conscious affirmation of an intention of continuing such relationship in regard to an existing liability. The Admission need not be in regard t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of this sanctioned. Thereafter, on 05.08.2017 Corporate Debtor requested for extension of OTS period by another 45 days (See page 187 of Appeal paper Book). On 28.08.2017 the Financial Creditor extended the time limit for payment of OTS amount on or before 13.09.2017 (See page 190 of Appeal paper Book) However, the Corporate Debtor has failed to pay the amount even after lapse of more than four months. Therefore, the Financial Creditor has cancelled the OTS vide letter dated 22.11.2017 (See page 191 of Appeal Paper Book) 18. With the aforesaid discussion it is proved that the Corporate Debtor has acknowledged the debt within three years i.e, before the expiration of the prescribed period for a suit or application. Thus, we are of the considered view that Learned Adjudicating Authority has rightly held that the Application under Section 7 of I B Code is well within limitation. Therefore, no interference is called for in this Appeal. Interim order passed in this Appeal Vacated. 19. Respondent No. 4 Shriram City Union Finance Limited can file its claim before the IRP as per the direction dated 10.07.2019 by the Adjudicating Authority, Chennai, in Company Petition No. 1239 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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