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TMI Blog2021 (5) TMI 443X X X X Extracts X X X X X X X X Extracts X X X X ..... e Term Loan-1 and ₹ 4,15,03,499.06 as on 31.03.2016 against the Term Loan-2 , totalling in all, a sum of ₹ 82,89,77,444/- and the total memorandum dues as on 30.06.2019 was ₹ 144,02,51,063.09. Further, the guarantor(s) on 20.02.2018 had executed Balance and Security Confirmation Letters for ₹ 78,74,73,945/- in respect of the account of Saptarishi Hotels Pvt. Ltd. (Corporate Debtor) in respect of the Term Loan Facility , which clearly point out that there was an Acknowledgement of Debt , in terms of Section 18 and 19 of the Limitation Act, 1963. Insolvency and Bankruptcy Code, 2016 - HELD THAT:- Section 3(11) of the I B Code, defines debt meaning a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt. Section 3(12) of the code, defines default meaning non-payment of debt when whole or any part or instalment of the amount of debt has become due and payable and is not paid by the debtor or the corporate debtor, as the case may be. Limitation Act, 1963 - HELD THAT:- The Application filed by the 1st Respondent/ Financial Creditor (Punjab National Bank) in July 2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 100% of the paid-up capital of Saptarishi Hotels Private Limited ( Corporate Debtor ) through its holding Company, Maha Hotels Projects Private Ltd. 4. The Learned Counsel for the Appellant submits that the Corporate Debtor /M/s.Saptarishi Hotels Private Limited is a Special Purpose Vehicle incorporated to undertake a Public Private Partnership (PPP) project to develop and operate a Four Star Hotel on Build Operate Transfer (BOT) Basis under Andhra Pradesh Infrastructure Development Enabling Act, 2001 with National Institute of Tourism and Hospitality Management (NITHM), an undertaking of Telangana Tourism Development Corporation Limited (which is fully owned company of the Government of Telengana). As a matter of fact, the Corporate Debtor along with Maha Hotels Projects Private Limited who is the lead developer was to develop the project on its own cost and operate on revenue sharing with National Institute of Tourism and Hospitality Management and transfer back the project to National Institute of Tourism and Hospitality Management at the end of 33 years. 5. The Learned Counsel for the Appellant points out that the Corporate Debtor was sanctioned Consorti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... more. 10. The Learned Counsel for the Appellant submits that the Adjudicating Authority has no jurisdiction to admit the Corporate Debtor for Corporate Insolvency Resolution Process in spite of the fact the same being barred by Limitation . 11. The Learned Counsel for the Appellant points out that the impugned order was passed in violation of the principles of Natural Justice , since no finding was rendered on the issue of Section 7 Application being barred by Limitation . 12. The Learned Counsel for the Appellant projects an argument that CIRP is a proceeding for Resolution of Insolvency and not for repayment of Debt and therefore, an Acknowledgement of Debt will not help the cause of the Applicant . 13. The Learned Counsel for the Appellant submits that the impugned order is a nullity in the eye of Law, because of the fact that the Adjudicating Authority had not decided the issue of limitation . Appellant s Decisions: 14. The Learned Counsel for the Appellant cites the Hon ble Supreme Court decision in BabulalVardharji Gurjar v Veer Gurjar Aluminium Industries Pvt. Ltd. anr reported in (2020) SCC Online SC 647 wherein under the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... limitation started ticking from the date of issuance of recovery certificate dated 24.12.2001. Again, in the case of Gaurav Hargovindbhai Dave (supra), where the date of default was stated in the application under Section 7 of the Code to be the date of NPA, i.e., 21.07.2011, this Court held that the limitation began to run from the date of NPA and hence, the application filed under Section 7 of the Code on 03.10.2017 was barred by limitation. 1st Respondent s Submissions: 15. The Learned Counsel for the 1st Respondent/Bank contends that the Appellant had not filed two vital documents viz. the Balance and Security Confirmation Letter dated 20.02.2018 executed by the Corporate Debtor . Further, on behalf of the 1st Respondent/Bank, attention of this Tribunal drawn to the Balance Security Confirmation Letter dated 20.02.2018 for ₹ 78,74,73,945/- and the Balance and Security Confirmation Letter dated 20.02.2018 for ₹ 4,15,03,499.06, both of them duly signed by the Guarantor(s) . 16. The Learned Counsel for the 1st Respondent/Bank brings to the notice of this Tribunal that on 15.10.2018, a sum of ₹ 15,262.75 was paid by the Corporate Debto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ooking to the very averment regarding default therein and for want of any other averment in regard to acknowledgement. In this view of the matter, reliance on the decision in Mahaveer Cold Storage Pvt. Ltd. does not advance the cause of the Respondent No.2. 30. An acknowledgement of debt interrupts the running of prescription. An acknowledgement only extends the period of limitation as per decision P. Sreedevi v. P. Appu , AIR 1991 Ker 76. It is to be remembered that a mere denial will not take sheen off the document and the claim of creditor remains alive within the meaning of Section 18 of the Limitation Act. Besides this, an acknowledgement is to be an acknowledgement of debt and must involve anadmission of subsisting relationship of debtor and creditor: and an intention to continue it and till it is lawfully determined must also be evident as per decision Venkata v. Parthasarathy , 16 Mad 220. An acknowledgement does not create a new right. 33. It is to be relevantly pointed out that a judgment of the Court has to be read in the context of queries which arose for consideration in the case in which the judgment was delivered. Further, an obiter dictum as dist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in accordance with Section 18 of the Limitation Act periodically. As a matter of fact, Section 18 of the Limitation Act, 1963 is applicable both for Suit and Application involving Acknowledgment of Liability , creating a fresh period of limitation, which shall be computed from the date when the Acknowledgement 37. For better and fuller appreciation of the present subject matter in issue, it is useful for this Tribunal to make a pertinent reference to Section 18 of the Limitation Act, 1963 which runs as under: 18 Effect of acknowledgment in writing:- (1) Where, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgment 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 acknowledgment 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany Appeal (AT) INS 385 of 2020 on the file of National Company Law Appellate Tribunal, New Delhi relates to the reference for reconsideration of the Judgment of the Appellate Tribunal rendered in the case of V. Padmakumar vs. Stressed Assets Stabilisation Fund and in the said Judgment, the issue that arose with the Tribunal was whether an Acknowledgement of Debt in the Balance Sheet can be treated as a valid acknowledgement for an extension of limitation period. Discussions: 19. In the Application filed by the 1st Respondent/Punjab National Bank ( Financial Creditor ) [under Section 7 of the I B Code r/w Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority ) Rules, 2016] to initiate CIRP in respect of M/s. Saptarishi Hotels Private Limited, the Bank under Part-IV Particulars of the Financial Debt had mentioned the following: 1 TOTAL AMOUNT OF DEBT GRANTD DATE(S) OF DISBURSEMENT 17/06/2011 ₹ 90.00 crs and 30/03/2015 ₹ 18.67 crs. 2 AMOUNT CLAIMED TO BE IN DEFAULT AND THE DATE ON WHICH THE DEFAULT OCCURD (ATTACH THE WORKING ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad created a Mortgage on the land admeasuring Ac.3.00 together with buildings in Survey No.91, Telecom Nagar, Gachibowli, Ranga Reddy District, Hyderabad. To monitor the Credit facilities in respect of M/s.Saptarishi Hotels Private Limited/ Corporate Debtor , the 1st Respondent/Punjab National Bank was nominated as the Lead Bank . 24. The clear cut stand of the 1st Respondent/Bank is that the Corporate Debtor (as agreed) had failed in its repayment of the balance amount, inspite of repeated reminders given by the Bank/ Financial Creditor , in respect of the loan facilities availed by it. 25. It is brought to the fore that the 1st Respondent/Bank/ Financial Creditor had issued a notice to the Corporate Debtor on 02.06.2016, as per Section 13(2) of the SARFAESI Act and that the Corporate Debtor had not paid the debt sum, despite the lapse of 60 days time given to it. 26. As on 30.06.2019, the outstanding amount due to be paid to the 1st Respondent/ Financial Creditor /Bank was ₹ 144.03 Crores. The Corporate Debtor and the Guarantors had executed Balance and Security Confirmation Letters dated 20.02.2018 in respect of the accounts of Saptarishi Hotels P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sation Fund Case (Company Appeal (AT)(INS) No.57 of 2020) and the Full Bench Judgment of the NCLAT dated 22.10.2020 made in Bishal Jaiswal v Asset Reconstruction Company (India) Ltd. and Anr. Company Appeal (AT)(INS) No.385 of 2020 (vide paragraphs 33 and 34) and allowed the Appeal by remanding the matter to the NCLAT to be decided in accordance with law laid down in the Judgment. Insolvency and Bankruptcy Code, 2016: 30. Section 3(6)(a) of the I B Code, 2016, defines claim meaning a right to payment, whether or not such right is reduced to judgment, fixed, disputed, undisputed, legal, equitable, secured or unsecured . Section 3(8) of the Code defines Corporate Debtor meaning a Corporate person who owes a debt to any person . Section 3(10) defines Creditor meaning any person to whom a debt is owed and includes a financial creditor, an operational creditor, a secured creditor, an unsecured creditor and a decree-holder. 31. Section 3(11) of the I B Code, defines debt meaning a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt. Section 3(12) of the code, defines default meaning ..... 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