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TMI Blog2021 (4) TMI 678X X X X Extracts X X X X X X X X Extracts X X X X ..... smissed - it is clear that Section 18 of the Limitation Act applies. Balance-Sheets-Acknowledgment? - HELD THAT:- There are various Judgements passed by various Hon ble High Courts including High Court of Delhi and even Hon ble Supreme Court of India which have dealt with the Balance Sheet/Annual Returns of Companies and entries in books of Account where entries in the same have been treated as acknowledgement of debt and even accepted the same for the purpose of Section 18 of the Limitation Act, 1963. It is well settled position of law that Annual Returns/Audited Balance Sheets can be referred to and relied on to see if contents therein amount to acknowledgement or not - it is settled law appearing from the Judgements of the High Court of Delhi and other High Courts that Balance Sheets can be looked into to see if there is acknowledgement of debt. Perusing Judgements of Hon ble Supreme Court we find that even Hon ble Supreme Court has looked into Balance Sheets and Books of Account to see if there is Acknowledgement of Liability. If the amount borrowed is shown in the Balance Sheet, it may amount to Acknowledgement. The Judgements of Hon ble Supreme Court of India are binding and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Advocates. For the Respondent: Mr. Dhruv Mehta, Sr. Advocate with Mr. PBA Srinivasan, Mr. Avinash Mohapatra, Mr. Neelkanthan (AR OF SBI),Ms. Icchha Kalash, Mr. Parth Tandon, Advocates. JUDGMENT A.I.S. Cheema, J. 1. Respondent-State Bank of India (Financial Creditor) filed Application C.P. (IB) No. 375/CHD/PB/2018 before the Adjudicating Authority (National Company Law Tribunal, Chandigarh Bench, Chandigarh) under Section 7 of Insolvency and Bankruptcy Code, 2016 (IBC in short). The Corporate Debtor in the said Petition filed C.A. 1161 of 2019 claiming that the Application was time-barred. The Adjudicating Authority heard both sides and by the Impugned Order dated 3rd March, 2020, inter alia after considering Judgment of Hon ble Supreme Court in the matter of A.V. Murthy Vs. B.S. Nagabasavanna (2002) 2 SCC 642 considered the balance-sheets available on record and found that there were acknowledgments of debts under Section 18 of the Limitation Act, 1963 and rejected the Application filed by the Corporate Debtor and admitted the Application under Section 7 of IBC. Corporate Insolvency Resolution Process (CIRP in short) was thus started. Hence, the present Appeal by Director of the Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Corporate Debtor was conducted by the Statutory Auditor as on 31.03.2014, and from there it came to know about the fact that the Restructuring done in the account of the Corporate Debtor got failed, thus the account of the Corporate Debtor was declared as NPA backdated from 30.09.2012 instead of 31.12.2013. 5. It is argued by the Appellant that State Bank of India initiated actions against the Corporate Debtor before DRT under SARFAESI Act. Subsequently, Application under Section 7 of IBC was filed. Paragraph 16 of the Impugned Order shows that Application under Section 7 was filed on 3rd October, 2018. Appellant is arguing that NPA declared is on 30.09.2012 and thus the Application was time-barred. According to the Appellant, in the Application under Section 7, the date of NPA mentioned was wrong and the Appellant had not relied on balance-sheet in the Application under Section 7. It is argued that the Application was thus defective and should have been rejected. According to the Appellant, the State Bank of India wrongly relied on One Time Settlement (OTS in short) issued by the Corporate Debtor on 20th January, 2017 and rejection of the same, to claim extension of period of limi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount three years form date of NPA and if Section 5 of Limitation Act has not been filed, the Application must be treated as time-barred. 7. According to the Appellant, larger Bench of this Tribunal in the matter of V. Padmakumar vs. Stressed Assets Stabilisation Fund (SASF) Anr. (Company Appeal (AT) (Ins.) No. 57 of 2020 dated 12.03.2020) has held that balance-sheet could not be relied on for acknowledgment under Section 18 of Limitation Act and that the same Judgment should be followed. Referring to Section 9 of the Limitation Act, the Appellant has argued that once time begins to run, no subsequent disability or inability to institute a suit or make an application stops the same. In answer to the query raised by this Tribunal at the time of arguments, Learned Counsel for the Appellant has submitted that Section 29 (2) of the Limitation Act cannot be relied on as legislative policy has provided that there is shift to date of default from inability to pay and this date of default does not shift. That there is only one default recognised under IBC. It is argued that legislation excluded all other provisions of Limitation Act including Section 4 to 24 to file an Application under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specifically or by implication any of these sections of Limitation Act and thus this Tribunal cannot ignore documents which amount to acknowledgment in law. The Learned Counsel for State Bank of India referred to Judgment in the matter of B. K. Education Services Pvt. Ltd. to submit that the Hon ble Supreme Court itself while referring to Article 137 of Limitation Act stated that Section 5 of the Limitation Act can be invoked when delay is to be condoned. It is argued that this shows that Section 4 to 24 of the Limitation Act cannot be excluded. Reference is also made to Judgment in the matter of Jignesh Shah (2019) 10 SCC 750 and Paragraph 21 in the said Judgment where it was observed that when time begins to run it can only be excluded in the manner provided in the Limitation Act and for example it was observed that an acknowledgment of liability under Section 18 of the Limitation Act would certainly extend the limitation period, but a suit for recovery, which is a separate and independent proceeding distinct from remedy of winding up would, in no manner, impact the limitation. The Learned Counsel for the State Bank of India referred to other Judgments also where entries in bala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the case may be. (Emphasis Supplied) It is clear from the above Section that the provisions of Limitation Act, 1963 shall apply as far as may be to the proceedings or Appeals before the Adjudicating Authority or this Tribunal. Thus it is necessary to look into the Limitation Act to consider how far Limitation Act may be, or could be applied. 23.2. Validity of Section 238-A were examined by the Hon ble Supreme Court of India in Judgment dated 11.10.2018 in the matter of B.K. Educational Services Vs. Parag Gupta MANU/SC/1160/2018 where reference was made to the Report of Insolvency Law Committee and Paragraph 6 read as under: 6. Having heard the learned counsel for both sides, it is important to first set out the reason for the introduction of Section 238-A into the Code. This is to be found in the Report of the Insolvency Law Committee of March 2018, as follows: 28 APPLICATION OF LIMITATION ACT, 1963 28.1. The question of applicability of the Limitation Act, 1963 (the Limitation Act) to the Code has been deliberated upon in several judgments of NCLT and NCLAT. The existing jurisprudence on this subject indicates that if a law is a complete code, then an express or necessary excl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the law is a complete Code and the fact that the intention of such a Code could not have been to give a new lease of life to debts which are time-barred. (Emphasis supplied) In the same Judgment of B.K. Educational Services, in Paragraph 27 it was observed as under: 27. It is thus clear that since the Limitation Act is applicable to applications filed under Sections 7 and 9 of the Code from the inception of the Code, Article 137 of the Limitation Act gets attracted. The right to sue , therefore accrues when a default occurs. If the default has occurred over three years prior to the date of filing of the application, the application would be barred under Article 137 of the Limitation Act, save and except in those cases where, in the facts of the case, Section 5 of the Limitation Act may be applied to condone the delay in filing such application. (Emphasis supplied) 23.3. From the above it can be seen that there was no intention to give new lease of life to debts which are time-barred. Thus, the consideration is whether a given debt is time-barred. It is also clear from the above that for Applications under Section 7 of IBC the Hon ble Supreme Court found that residuary Article 137 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation has not been set up as a defence. Thus to consider, if given debt is or not barred by Limitation Sections 4 to 24 are relevant. In B.K. Educational Services we have already seen that Hon ble Supreme Court has held that to condone delay Section 5 will have to be applied. We need to see other sections now to consider whether the debt is not barred by Limitation considering the provisions as may be applicable. 23.10 This takes us to sections 4 to 24. Relevant for the present matter are Sections 18 and 19 which read as under: 18: Effect of acknowledgement in writing: (1) Where, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgement of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgement was so signed. (2) Where the writing containing the acknowledgement is undated, oral evidence may be given of the time when it was signed; but subject to the provisions of the Indian Eviden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was further observed by us in Paragraph 26 of our Judgment in Rajendra Narottamdas supra as under: 26. The Learned Counsel for the Appellant referring to Judgment in the matter of Jagdish Prasad Sharda referred (Supra.) of another bench of this Tribunal submitted that in that matter it was interpreted that even if the payments were made after the Account was declared NPA if the Account was not regularized benefit cannot be taken. It may be clarified that limitation issue is decided on facts and law both and it differs from case to case. In the instant case, when Bank declared NPA to recover dues, it moved DRT. If the Corporate Debtor made some payments, as a reasonable prudent person, Bank received the payments. Section 19 of the Limitation Act, 1963 is not subject to any qualification/exception that after Account is declared NPA, if the debtor makes payments on account of debt, the Section would not be applicable. The Adjudicating Authority found that there were not merely repayments but also Acknowledgments. Ref: Judgment of this Tribunal in A. Balakrishnan Vrs. Kotak Mahindra 12. In the matter of A. Balakrishnan Vs. Kotak Mahindra Bank Limited Anr. (Company Appeal (AT) (Insolve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reme Court accepted the submissions that the time of Limitation when it began running on 21.07.2011, the Application under Section 7 filed on 03.10.2017 was time-barred. Thus, it appears to us that the filing of OAs and pendency of the same did not extend the time for the Financial Creditor, in independent proceeding under IBC. 14. Then, there is Judgment in the matter of Jignesh Shah. Vs. Union of India (2019) SCC Online SC 1254. In Paragraph 4 of the Judgment, the Hon ble Supreme Court of India initially referred to the controversy as was arising in the Writ Petition No. 455 of 2019. 14.1. Briefly the facts may be referred from the Judgment. What appears is that on 20th August, 2009 a Share Purchase Agreement was executed between Multi Commodity Exchange India Ltd. (MCX), Multi Commodity Stock Exchange Ltd. (MCX-SX) and IL FS whereby IL FS had agreed to purchase 442 lakh equity shares of MCX Stock Exchange Ltd. from MCX. Pursuant to the Agreement La-Fin Group Company of MCX issued Letter of Undertaking on 20th August, 2009 stating that La-Fin or its appointed nominees would offer to purchase from IL FS the shares of MCX Stock Exchange after a period of one year but before a perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Pvt. Ltd. vs. Parag Gupta Associates in which Section 238 A of the Code relating to the Limitation was considered. The Hon ble Supreme Court in Paragraph 8 to 11 of the Judgment in the matter of Jignesh Shah Vs. Union of India reproduced portion from Judgment in the matter of B.K. Educational Services Pvt. Ltd. and after referring to the said Judgment observed in Paragraph 12 and 13 as under: 12. This Judgment clinches the issue in favour of the Petitioner/Appellant. With the introduction of Section 238 A into the Code, the provisions of the Limitation Act apply to applications made under the Code. Winding up Petitions filed before the Code came into force are now converted into petitions filed under the Code. What has, therefore, to be decided is whether the Winding up Petition, on the date that it was filed, is barred by lapse of time. If such petition is found to be time-barred, then Section 238 A of the Code will not give a new lease of life to such a time-barred petition. On the facts of this case, it is clear that as the Winding up Petition was filed beyond three years from August, 2012 which is when, even according to IL FS, default in repayment had occurred, it is barred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs of the default and when such Winding up Petition was transferred in view of the Rules to the NCLT to convert the same into a proceeding under Section 7 of IBC, it was found that as the Winding up Petition itself was time-barred from the date of default, the same could not be proceeded further as Application under Section 7. 13. Further, we had discussed in our Judgment in the matter of A. Balakrishnan supra paragraphs 19 to 21 as under: 19. It has already been held by the Hon ble Supreme Court that when there is default and the Account is classified as NPA the time would start running. When this is so, if filing of the suit or filing of OAs did not extend the time, the question is whether consequential issuing of Recovery Certificate would trigger a fresh cause of action for filing Application under Section 7 of IBC. Clearly this is not so keeping in view above Judgments. The Learned Counsel for the Respondent No. 1 appears to be not properly reading the Judgment in the matter of Vashdeo R Bhojwani Vs. Abhyudaya Co-operative Bank Ltd. Anr. To complete the narration it would be appropriate to reproduce the Judgment as it is, as the same is not very long. The Judgment in the matte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hree learned Judges of this Court in Balkrishna Savalram Pujari and Others vs. Shree Dnyaneshwar Maharaj Sansthan Others , [1959] supp. (2) S.C.R. 476. In this case, this Court held as follows: . In dealing with this argument it is necessary to bear in mind that S. 23 refers not to a continuing right but to a continuing wrong. It is the very essence of a continuing wrong that it is an act which creates a continuing source of injury and renders the doer of the act responsible and liable for the continuance of the said injury. If the wrongful act causes an injury which is complete, there is no continuing wrong even though the damage resulting from the act may continue. If, however, a wrongful act is of such a character that the injury caused by it itself continues then the act constitutes a continuing wrong. In this connection it is necessary to draw a distinction between the injury caused by the wrongful act and what may be described as the effect of the said injury. It is only in regard to acts which can be properly characterized as continuing wrongs that S. 23 can be invoked. Thus considered it is difficult to hold that the trustees, act in denying altogether the alleged rights of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeal (AT) (Ins.) No. 1379 of 2019 also the Learned Counsel therein had claimed that the date of NPA was to be ignored and Limitation was to be counted from the date of Recovery Certificate for Section 7 of IBC. We had at that time gone into details and for reasons recorded concluded that we are unable to accept the submissions that date of NPA was to be ignored and Limitation was to be counted from the date of Recovery Certificate. Even now, for reasons recorded by us in the Judgment of Digamber Bhondwe Vs. JM Financial Asset Reconstruction, when we have revisited the Judgment in the matter of Vashdeo R Bhojwani Vs. Abhyudaya Co-operative Bank Ltd. Anr. we are unable to agree that the Judgment gives a fresh date to trigger Application under Section 7 of IBC. 14. In this regard, now we have the advantage of Judgment of Hon ble Supreme Court of India, dated 22.03.2021 in the matter of Sesh Nath Singh Anr. Vs. Baidyabati Sheoraphuli Co-operative Bank Ltd. Anr. (Civil Appeal No. 9198 of 2019). In the said matter, the Account of Corporate Debtor was declared N.P.A. on 31st March, 2013. On 18th January, 2014, Financial Creditor issued notice to Corporate Debtor under Section 13 (2) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n enables the Court to admit an application or appeal if the applicant or the appellant, as the case may be, satisfies the Court that he had sufficient cause for not making the application and/or preferring the appeal, within the time prescribed. Although, it is the general practice to make a formal application under Section 5 of the Limitation Act, 1963, in order to enable the Court or Tribunal to weigh the sufficiency of the cause for the inability of the appellant/applicant to approach the Court/Tribunal within the time prescribed by limitation, there is no bar to exercise by the Court/Tribunal of its discretion to condone delay, in the absence of a formal application. 64. A plain reading of Section 5 of the Limitation Act makes it amply clear that, it is not mandatory to file an application in writing before relief can be granted under the said section. Had such an application been mandatory, Section 5 of the Limitation Act would have expressly provided so. Section 5 would then have read that the Court might condone delay beyond the time prescribed by limitation for filing an application or appeal, if on consideration of the application of the appellant or the applicant, as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 9 of the IBC, is default on the part of the Corporate Debtor, and the provisions of the Limitation Act 1963, as far as may be, have been applied to proceedings under the IBC, there is no reason why Section 14 or 18 of the Limitation Act would not apply for the purpose of computation of the period of limitation. 92. In other words, the provisions of the Limitation Act would apply mutatis mutandis to proceedings under the IBC in the NCLT/NCLAT. To quote Shah J. in New India Sugar Mill Limited v. Commissioner of Sales Tax, Bihar, It is a recognised rule of interpretation of statutes that expression used therein should ordinarily be understood in a sense in which they best harmonise with the object of the statute, and which effectuate the object of the Legislature . Thus, it is clear that Section 18 of the Limitation Act applies. Balance-Sheets-Acknowledgment? 15. With regard to the Balance-Sheets, the Learned Counsel for the Appellant has relied on Judgment of larger Bench of this Tribunal in the matter of V. Padmakumar Vs. Stressed Assets Stabilisation Fund (SASF) Anr. (Company Appeal (AT) (Insolvency) No. 57 of 2020). 16. In this regard, we find that there are various Judge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mence from the time when the acknowledgement was so signed. In an early case, in England, in Jones v. Bellgrove Properties, (1949) 2KB 700, it was held that a statement in a balance sheet of a company presented to a creditor- share holder of the company and duly signed by the directors constitutes an acknowledgement of the debt. In Mahabir Cold Storage v. CIT (1991) 188 ITR 91, the Supreme Court held: The entries in the books of accounts of the appellant would amount to an acknowledgement of the liability to Messrs. Prayagchand Hanumanmal within the meaning of Section 18 of the Limitation Act, 1963, and extend the period of limitation for the discharge of the liability as debt. In several judgments of this Court, this legal position has been accepted. The Hon ble High Court then referred to some of the Judgements. 9. In the Judgement in the matter of Sheetal Fabrics (supra), Hon ble High Court of Delhi referred to Judgement in the matter of In re. Padam Tea Company Ltd. AIR 1974 Calcutta 170 and referred to the said Judgement as under:- 10. Let me first deal with the case of Padam Tea Co. Ltd. (supra). This case relied upon by learned Counsel for the respondent company in support o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be accompanied by a report, if any, made by the Directors. Therefore, even though the balance sheet may be a separate document these two documents in the facts and circumstances of the case should be read together and should be construed together. 13. In the same breath, the High Court also explained as to what would constitute an acknowledgement under Section 18 of the Limitation Act by referring to the judgment of the Supreme Court and this discussion would be found in the following passage: It was held by the Supreme Court in the case of L.C. Mills v. Aluminium Corpn. of India Ltd., (1971) 1 SCC 67 : AIR 1971 SC 1482, that it was clear that the statement on which the plea of acknowledgement did not create a new right of action but merely extended the period of limitation. The statement need not indicate the exact nature or the specific character of the liability. The words used in the statement in question must, however, relate to a present subsisting liability and indicate the existence of a jural relationship between the parties such as, for instance, that of a debtor and a creditor and the intention to admit such jural relationship. Such an intention need not, however, be i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Prakash Jain vs. Santosh Devi Sharma 67 (1997) DLT 13, S.N. Kapoor J. applied the principle in a case where the primary question was whether a suit under Order 37 CPC could be filed on the basis of an acknowledgement. In Larsen Tubro Ltd. v. Commercial Electric Works 67 (1997) DLT 387 a Single Judge of this Court observed that it is well settled that a balance sheet of a company, where the defendants had shown a particular amount as due to the plaintiff, would constitute an acknowledgement within the meaning of Section 18 of the Limitation Act. In Rishi Pal Gupta v. S.J. Knitting Finishing Mills Pvt. Ltd. 73 (1998) DLT 593, the same view was taken. The last two decisions were cited by Geeta Mittal, J. in S.C. Gupta v. Allied Beverages Company Pvt. Ltd. (decided on 30/4/2007) and it was held that the acknowledgement made by a company in its balance sheet has the effect of extending the period of limitation for the purposes of Section 18 of the Limitation Act. In Ambika Mills Ltd. Ahmedabad v. CIT Gujarat (1964) 54 ITR 167, it was further held that a debt shown in a balance sheet of a company amounts to an acknowledgement for the purpose of Section 19 of the Limitation Act and in ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. The submission that the letter was written without prejudice to the legal rights and remedies available under any law and therefore the acknowledgement or the undertaking has no legal effect must likewise be rejected. This letter is reminiscent of a letter that fell for consideration in Spencer s case as pointed out by Mr. Harish Salve, as a Rule the debtor who writes such letters has no intention to bind himself further than is bound already, no intention of paying so long as he can avoid payment, and nothing before his mind but a desire, somehow or other, to gain time and avert pressure. It was argued in a subsequent case that an acknowledgment made without prejudice in the case of negotiations cannot be used as evidence of anything expressly or impliedly admitted. The House of Lords observed as follows: But when a statement is used as acknowledgement for the purpose of Section 29 (5), it is not being used as evidence of anything. The statement is not an evidence of an acknowledgement. It is the acknowledgement. Therefore, the without prejudice Rule could have no application. It said: Here, the respondent, Mr. Rashid was not offering any concession. On the contrary, he was see ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conclusion that the Resolution or the Balance Sheet did not help the Appellant. It is not that it was held that for the purpose of limitation, Balance Sheet cannot be considered at all. 25. In the matter of A.V. Murthy Versus B.S. Nagabasavanna reported as (2002) 2 SCC 642, while dealing with a complaint under Section 138 of the Negotiable Instruments Act, 1881 when dispute came up whether the cheque drawn was in respect of a debt or liability not legally enforceable, and the Additional Sessions Judge had held that there was error in taking cognizance of the offence, Hon ble Supreme Court observed in Para 5 as under:- Moreover, in the instant case, the appellant has submitted before us that the respondent, in his balance sheet prepared for every year subsequent to the loan advanced by the appellant, had shown the amount as deposits from friends. A copy of the balance sheet as on 31-3-1997 is also produced before us. If the amount borrowed by the respondent is shown in the balance sheet, it may amount to acknowledgement and the creditor might have a fresh period of limitation from the date on which the acknowledgement was made. However, we do not express any final opinion on all the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal or application by any special or local law, the provisions contained in sections 4 to 24 (inclusive) shall apply only in so far as, and to the extent to which, they are not expressly excluded by such special or local law. (3) Save as otherwise provided in any law for the time being in force with respect to marriage and divorce, nothing in this Act shall apply to any suit or other proceeding under any such law. (4) Sections 25 and 26 and the definition of easement in section 2 shall not apply to cases arising in the territories to which the Indian Easements Act, 1882 (5 of 1882), may for the time being extend. It is clear that Insolvency and Bankruptcy Code is a special law. Section 238 A of IBC states that the provisions of the Limitation Act shall, as far as may apply to the proceedings or Appeals before the Adjudicating Authority and this Tribunal as the case may be. Article 137 of the Limitation Act applies to the applications filed under Section 7 and 9 of IBC has already been held by the Hon ble Supreme Court. IBC has not excluded Application of Section 4 to 24 while determining Period of Limitation and Section 29 (2) appears to be applicable. This being so, Section 18 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e similar entries for the year ending 31st March, 2016. Learned Counsel for the Appellant referred to auditor s report filed at Annexure A-10 (Page 202) and the observation of the Auditor at Page 204 which reads as under: c) Since all the accounts of the company have been declared sub-standard over a period of time. Pursuant to receipt of notice dated 12.01.2016 under section 13(4) of The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act, 2002). The banks have started recovery action under SARFAESI Act. In the absence of any information on interest on outstanding dues to the bank, the provision of interest has been made on the basis of assumptions which are not certain. Hence balances with banks are subject to confirmation. 35. Referring to such endorsement, the Appellant is arguing that even if the balance-sheet is to be looked into, the Corporate Debtor had admitted the amounts with qualification that the amounts are yet to be confirmed by the Corporate Debtor. We have already seen the provision of Section 18 reproduced (Supra). We do not accept such submission that the debt was not acknowledged. What the above endo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch is relied on may be reproduced as a whole. In Paragraph 37 of the said Judgment Hon ble Supreme Court observed as under: 37. The trigger for a financial creditor s application is non-payment of dues when they arise under loan agreements. It is for this reason that Section 433 (e) of the Companies Act, 1956 has been repealed by the Code and a change in approach has been brought about. Legislative policy now is to move away from the concept of inability to pay debts to determination of default . The said shift enables the financial creditor to prove, based upon solid documentary evidence, that there was an obligation to pay the debt and that the debtor has failed in such obligation. Four policy reasons have been stated by the learned Solicitor General for this shift in legislative policy. First is predictability and certainty. Secondly, the paramount interest to be safeguarded is that of the corporate debtor and admission into the insolvency resolution process does not prejudice such interest but, in fact, protects it. Thirdly, in a situation of financial stress, the cause of default is not relevant; protecting the economic interest of the corporate debtor is more relevant. Fourth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01.2014. For One time Settlement ( OTS ) the Corporate Debtor has requested the Bank vide its letter dated 20.01.2017 which also includes their earlier letters dated 12.04.2016 and 06.08.2016 regarding settlement / resolution of the account of the Company (This is available at Page 61 of the Respondent reply / Annexure R-1 Colly vide NCLAT Diary No. 22364 dated 28.09.2020). 2. Both the above issues supplement the coverage under Section 18 of the Limitation Act, 1963 particularly in view of the explanation (a) attached to the Section 18 of the Limitation Act, 1963. 3. However, Balance Sheet cannot be treated as acknowledgment of debt as held by this Tribunal in a larger Bench by a majority judgment in the case of V Padmakumar Vs. Stressed Assets Stabilization Fund (SASF) Anr., Company Appeal (AT)(Ins) No. 57 of 2020 and the same was fortified by the judgment dated 22.12.2019 passed by a five members bench of this Tribunal in reference in the matter of Bishal Jaiswal Vs. ARC (India) Ltd Anr. Company Appeal (AT) (Ins) No. 385 of 2020. 4. Hon ble Supreme Court in Sesh Nath Singh Anr. Vs. Baidyabati Sheoraphuli Co-operative Bank Ltd and Anr. in Civil Appeal No. 9198 of 2019 delivered on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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