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TMI Blog2020 (6) TMI 737X X X X Extracts X X X X X X X X Extracts X X X X ..... hority has not taken into consideration the statutory provision of Sub Clause (5)(a) of Sec 7 of the Code and passed the Admission Order. Admittedly, in this case date of default is shown as 12th May 2015. As per Article 137 of Limitation Act, the limitation period of three years was available to the applicant. But before expiration of limitation period on 03rd March 2018, the Corporate Debtor submitted an acknowledgment of debt in writing and promise to clear the dues at the earliest possible. In addition to this, the Corporate Debtor had also submitted OTS proposal which was later on accepted by the Bank - it is clear that a fresh period of limitation started after the acknowledgement of the debt by the Corporate Debtor and the Petition was filed within the extended period of limitation on account of Section 18 of the Limitation Act. Therefore, it is a Petition is not time-barred. On perusal of the record it is apparent that after acceptance of OTS for settling the dues of all the three companies ₹ 60/- Crores, Bank has received substantial amount from the Corporate Debtor. It is also clear that after making default in payment as per terms of OTS the Corporate Debtor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period of three years. 4. The Appellant contends that during the pendency of the Petition Respondent Bank entered into OTS. However, the Respondent Bank did not withdraw the Petition and suddenly on 29th July 2019 issued a letter asking them to deposit the balance amount as per terms of OTS. But later on, another notice about the revocation of OTS was sent on 31st July 2019. The corporate debtor received the said letter on 07th August 2019. 5. The Appellant pleaded that the Respondent Bank has not given a reasonable time to the corporate debtor and has acted arbitrarily; that during consideration of OTS, the Appellant on behalf of all the three companies handed over rupees One Crore to the Respondent Bank on 19th August 2019 as part payment against OTS. By accepting the part consideration in connection with the OTS, the Respondent Bank has taken the settlement; the Petition is barred by limitation as per Section 238-A of the Code, read with Article 137 of the Limitation Act; the particulars of Form 2 are incomplete. Therefore, the Application filed under Section 7 of the Code could not have been admitted; the applicant has failed to satisfy the compliance of Section 7(5)(a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent Bank which was sanctioned by the Bank on 27th December 2018. The same was also accepted by the Appellant on 10th January 2019. However, the Appellant failed to adhere to the terms and conditions of the OTS. As such, the Competent Authority of the Bank revoked the OTS on 31st July, 2019 and the same was also conveyed to the Appellant . 11. It is further stated in the Written Submissions of the Respondent that during the pendency of the present proceedings, the Appellant again approached the Respondent Bank for the revival of earlier OTS by tendering a cheque for Rs. One Crore as partial payment of OTS on 10th October 2019. Since the amount offered was on a lower side, and the Appellant had failed to comply the earlier terms and conditions of OTS, the Competent Authority of Bank did not deem it fit to consider it again. The said decision was conveyed by the Respondent Bank vide their letter dated 16th October, 2019 . 12. Based on the above submissions, it is undisputed that the consolidated amount of ₹ 60 crores was offered by the Appellant for the outstanding dues of all the three Companies through OTS and this offer was accepted by the Bank on 27th December 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lause (b) of sub-section (5) to the financial creditor, within seven days of admission or rejection of such Application, as the case may be. Section 7(5)(a) provides that where the Adjudicating Authority is satisfied that the default has occurred and the Application under Section (2) is complete and no disciplinary proceeding pending against the proposed Resolution Professional, it may, order, admits such Application. Therefore, a petition under Section 7 can be admitted by the Adjudicating Authority if it is complete and satisfies the parameters as laid down in Section 7(5)(a) of the Code. In this case, the Appellant alleges that Form 2 prescribed under the Adjudicating Authority Rules, which was filed along with the Application, copy of which is Annexure-A3 annexed with the Appeal, is not proper. The Photostat copy of Annexure A3 is as under: On perusal of the declaration by the proposed Insolvency Resolution Professional, it appears that the proposed IRP Mr Anil Agarwal has not given declaration that no disciplinary proceeding is pending against him. It is also evident that the declaration of proposed Insolvency Resolution Professional, Annexure A3, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucturing happened on 25th July 2014, whereas the Petition was filed on 09th July, 2018. Therefore, the claim of the Respondent Bank is time barred. In this connection it is further contended by the Appellant that date of default as shown in the Form 1 is 12th May 2015 and Petition is filed on 09th July 2018. Therefore, on this basis petition is time barred. 21. It is important to mention that Appellant has annexed a letter Annexure A4 dated 03rd March 2018, wherein it is stated that: Now, by arranging fund from our friends and relatives as well as taking materials on job work basis. We have started operation of the plant, market is also improving and accordingly, we have submitted proposal from One Time Settlement of debt. We are already negotiations with some investors, who will bring in money and run the plant jointly with us immediately after OTS and also support in repaying the OTS amount. .. Moreover, we are trying our level best to settle and clear your banks dues at the earliest possible. We have already submitted OTS proposal. (Verbatim copy) 22. The above acknowledgment of debt dated 03rd March 2018. Section 18 of the Limitation Act provides th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sal dated 06th August 2018 of ₹ 60/- Crores in group account was accepted by the Bank on 27th December 2018 and the Corporate Debtor has paid ₹ 6.79 Crores in furtherance of the OTS. It is also on record that the Respondent Bank has further accepted a sum of rupees One Crore on 21st August 2019 regarding renewal of OTS. The cheque dated 21st August 2019 was encashed by the Bank even after revocation of the OTS during pendency of Section 7 of the Application. 26. On perusal of the record it is apparent that after acceptance of OTS for settling the dues of all the three companies ₹ 60/- Crores, Bank has received substantial amount from the Corporate Debtor. It is also clear that after making default in payment as per terms of OTS the Corporate Debtor further paid rupees One Crore to the Bank for renewing the OTS. Bank even after accepting after rupees One Crore revoked the offer to renew the OTS. Considering the present/prevailing economic scenario of the country and downfall/slump in every business activity, we deem it fit and proper to provide one more opportunity to the parties for considering the OTS (One Time Proposal) in a fair, just, objective and dispassi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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