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TMI Blog2021 (3) TMI 686X X X X Extracts X X X X X X X X Extracts X X X X ..... he default has occurred over three years prior to date of filing of the application under Section 7 of the I B Code; the application would be barred under Article 137 of the Limitation Act. The date of right to sue can be extended only when the debt is acknowledged by the Corporate Debtor within limitation of three years - Admittedly, in this case, the Appellant has committed default and the loan account declared as NPA before 2001 and thereafter - Respondent No. 1 has not placed on record any document of acknowledgement of debt within limitation of three years. The Corporate Debtor committed default and the loan account declared as NPA before 2001 and thereafter, there is no acknowledgement of debt within limitation of three years and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Corporate Debtor. 2. Brief facts of this case are that on 06.03.1998 Industrial Development Bank of India (IDBI) granted a term loan facility of aggregate value of ₹ 650 lakhs to the M/s L.S.P. Agro Ltd. (Corporate Debtor). The aforesaid loan amount was disbursed to the Corporate Debtor from 21.03.1998 to 08.12.1999. Thereafter, on 09.06.2000 IDBI bank granted another loan facility of aggregate value of ₹ 425 lakhs to the Corporate Debtor. Under the second loan agreement amount aggregating to ₹ 400 lakhs was disbursed to the Corporate Debtor from 16.6.2000 till 28.09.2000. Thus, the total loan amount disbursed by the IDBI to the Corporate Debtor under two loan facilities was aggregate to ₹ 10.50 Crores. 3. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncial Creditor) filed an Application under Section 7 of the I B Code before the Adjudicating Authority to initiate the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. 6. During the pendency of the Application, DRT-II has allowed the O.A. on 29.04.2019 in favour of the Financial Creditor and subsequently, issued a recovery certificate dated 16.01.2020 in favour of the Respondent No. 1 (Financial Creditor) and against the Corporate Debtor for a sum of ₹ 11,05,92,791 alongwith 12% simple interest per annum from the date of institution of O. A. i.e. 06.02.2002 till realisation. 7. The Corporate Debtor has resisted the Application on two grounds that SASF has no locus to file the Application on behalf of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king into consideration the facts, the Supreme Court held that the default having taken place and as the account was declared NPA on 21.07.2011, the Application under Section 7 of the I B Code filed in 2017 is clearly barred by limitation. In the instant case the loan account of Corporate Debtor was declared NPA before the 2001, thereafter, there is no acknowledgement of debt within three years and a decree/order passed by the DRT cannot forward the date of default. Thus, the Application under Section 7 of the I B Code filed on 23.01.2019 is apparently time barred and therefore, impugned order is liable to be set aside. 10. Per Contra, Learned Counsel for the Respondent No.1 supports the impugned order and submitted that Ld. Adjudicating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only when a default has occurred. Hon ble Supreme Court in the Case of B.K. Education Services Pvt. Ltd. Vs. Parag Gupta Associates 2019 11 SCC 633 held that the right to sue accrues when a default occurs. If the default has occurred over three years prior to date of filing of the application under Section 7 of the I B Code; the application would be barred under Article 137 of the Limitation Act. The date of right to sue can be extended only when the debt is acknowledged by the Corporate Debtor within limitation of three years. Admittedly, in this case, the Appellant has committed default and the loan account declared as NPA before 2001 and thereafter, IDBI filed O.A. No. 78 of 2002 before DRT-I. The Respondent No. 1 has not placed on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decree is passed, the date of default cannot be shift forward to the date of decree or date of payment for execution as a decree can be executed within specified period i.e. 12 years. If it is executable within the period of limitation, one cannot allege that there is a default of decree or payment of dues. 18. Therefore, we hold that a Judgment or a decree passed by a Court 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 . xxx xxx xxx 23. In the present case, as we find that the account of the Corporate Debtor was declared NPA on 31st October, 2002 and decree was pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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