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TMI Blog2021 (4) TMI 574X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Limitation Act, 1963 - Perusal of Section 19 shows that where payment is made on account of debt or interest before expiration of the prescribed period by the person liable to pay, fresh period of limitation of time can be computed when the payments are made. The date of NPA will not shift, it will remain the foundation of debt and period of limitation gets triggered from that date. But if the prescribed period is computed in accordance with the Limitation Act, section 18 and 19 are attracted. The Corporate Debtor failed to pay the amounts due as on 31.12.2014 and again on 31.03.2019 on the date of payment of TDS on interest by the Corporate Debtor,the limitation for filing a petition therefore starts on 31.03.2019 and extends for period of three years from 31.03.2019.Therefore, the petitioner s claim under Sec 3(6)(a) of the Code is established, further there is clear evidence of debt and default of non-payment of monies by Corporate Debtor - an investment is payable on demand. Payment of TDS on interest is not only an acknowledgment of debt which constitutes a confirmation of debt by Corporate Debtor that is liable to pay the principal sum borrowed and further extends t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10.2012 bearing nos. 09113 and 09116 drawn on State Bank of India (SBI) amounting to ₹ 2.00 crore.No payments were received by the Petitioner. However, the Corporate Debtor hasintermittentlydeposited TDS on interestpayable to Financial Creditor.On the due date of repayment i.e. on 03.10.2012, the Corporate Debtor approached the Financial Creditor and expressed its inability to repay the loan amount at the relevant time and requested for an extension of time for repayment of loan.In the year 2019, as the Corporate Debtor failed to seek extension of time for repayment of loan, as such the Petitioner issued legal notice dated 25.09.2019 recalling the entire amount. 7. The Corporate Debtor had committed default of non-payment of ₹ 3,70,32,768/- and the ledger account filed by the Corporate Debtor also corroborates the facts that the amount is not paid by the Corporate Debtor. The default on the part of the Corporate Debtor is recurring in nature. The Corporate Debtor on 14.10.2019 refused to make repayment of amount due under the loan agreement. 8. The Petitioner submits that the Corporate Debtor was liable to pay the amount and due interest and therefore, is a financ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der of admission based on oral understanding. In the absence of any written document on record the application u/s 7 is not maintainable. 16. The Corporate Debtor filed an additional affidavit placing on record the ledger accountsof the Petitioner, to demonstrate the account of Petitioner from the date of payment of monies by the Petitioner. The ledger account from the year 2012 captures payment of interest to the Petitioner on several dates. The entry shown on 30.04.2012 captures that the Corporate Debtor has converted the loan into investment and transferred the said amount to logistic project - JV account. The fact of conversion of loan account into investment was not notified to the Petitioner. FINDINGS: 17. The questions for consideration are as follows: a. Whether the amount paid towards interest as on 31.03.2019 extends the period of limitation? b. Whether section 18(1) 19 of Limitation Act, 1963 is applicable to the provisions of IBC? 18. The Petitioner has been able to demonstrate that an amount of ₹ 2.00 crore was paid under loan agreement to the Corporate Debtor vide acknowledgement letters on 05.04.2012 and 07.04.2012. The Loan extension le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Corporate Debtor back on its feet, not a mere money recovery legislation. That CIRP is not intended to be adversarial to the Corporate Debtor but is aimed to at protecting the interest of the Corporate Debtor. The intention of the Code is not to give new lease of life to debts which are time barred. That the period of limitation for an application seeking initiation of CIRP under Section 7 is governed by Article 137 and is therefore, three years from the date when right to apply accrues on the date of default.That default referred to in the Code is that of actual non-payment by the Corporate Debtor when the debt has become due and repayable. That if the default has occurred over three years prior to the date of filing of Application. The application will be time barred. Save and except in those cases where on facts the delay in filing may be condoned. An application under Section 7 is not for enforcement of mortgage liability and Article 62 of the Limitation Act does not apply to this application. 23. In the present case evidently there has been payment ofTDS on interest on31.03.2014, an amount of ₹ 60,493/- was paid on 31.03.2017, an amount of ₹ 2,40,000/- w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 behalf, a fresh period of limitation shall be computed from the time when the payment was made: Provided that, save in the case of payment of interest made before the 1st day of January, 1928, an acknowledgment of the payment appears in the handwriting of, or in a writing signed by, the person making the payment. Explanation -Explanation.-For the purposes of this section,- (a) where mortgaged land is in the possession of the mortgagee, the receipt of the rent or produce of such land shall be deemed to be a payment; (a) where mortgaged land is in the possession of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd any merit in the appeal. The appeal is, accordingly, dismissed, pending application(s) if any shall stand disposed of . 28. Upon conjoint reading of the provisions of the IBC, the Limitation Act and settled propositions of law in catena of judgements of Hon ble Supreme Court from VasudeoBhojwani s case, Gaurav Hargovindbhai Dave s case, BK educational Services s case, Jignesh Shah s case and judgements of Hon ble NCLAT , it is fairly established that the Corporate Debtor failed to pay the amounts due as on 31.12.2014 and again on 31.03.2019 on the date of payment of TDS on interest by the Corporate Debtor,the limitation for filing a petition therefore starts on 31.03.2019 and extends for period of three years from 31.03.2019.Therefore, the petitioner s claim under Sec 3(6)(a) of the Code is established, further there is clear evidence of debt and default of non-payment of monies by Corporate Debtor.The ledger accounts produced by the Corporate Debtor further evidences the fact that the loans were converted into investment by the Corporate Debtor. Thus, an investment is payable on demand. Payment of TDSoninterest is not only an acknowledgment of debt which constitutes a conf ..... X X X X Extracts X X X X X X X X Extracts X X X X
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