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TMI Blog2021 (7) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... - SUPREME COURT ] and then in Judgement in the matter of LAXMI PAT SURANA VERSUS UNION BANK OF INDIA ANR. [ 2021 (3) TMI 1179 - SUPREME COURT ] and in ASSET RECONSTRUCTION COMPANY (INDIA) LIMITED VERSUS BISHAL JAISWAL ANR. [ 2021 (4) TMI 753 - SUPREME COURT ]. The Hon ble Supreme Court has dealt with its earlier judgments, and now it is quite clear that Sections 18 19 of the Limitation Act, 1963 and the other provisions of the Limitation Act, as far as may be apply to the proceedings under the I B Code - Thus, Section 18 of the Limitation Act, 1963 applies. The reply filed by the Corporate Debtor which was filed before the Adjudicating Authority clearly shows that the Corporate Debtor had specifically raised issue with regard to limitation and made reference to Section 348A as well as judgments on which the Appellant wants to rely and the issues were specifically raised and the Adjudicating Authority in impugned order considered the issue with regard to limitation and recorded finding as in para 8. Thus, it is not the case where foundation has not been laid. There were pleadings before the Adjudicating Authority. The format has been prescribed by the statute and the Bank had clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h July, 2018, the Corporate Debtor acknowledged debt outstanding by a letter sent to the Bank. The Application was thus filed on 11th September, 2019 before the Adjudicating Authority claiming debt due and in default of ₹ 268,37,90,311/-. The date of default was intimated in Form is 15th March, 2016. 3. Before the Adjudicating Authority, the Corporate Debtor put up a defence that under Section 238A of the 'I&B Code' read with Article 137 of the Limitation Act, 1963, the period of limitation was three years and the account having been declared NPA on 15th March, 2016, the Application filed in 2019 was time barred. The other reasons were also submitted by the Corporate Debtor for the default mentioning that the cost of the project had increased; that in the Common Loan Agreement, the Bank had to provide ₹ 200 Crores and Bank of India to provide ₹ 116 Crores but the amount disbursed was less and only ₹ 280.94 Crores. The other issues were also raised like interest being usurious. 4. The Adjudicating Authority, after hearing the parties, observed in Para- 8 of the impugned order as under:- "8. Heard the parties and perused the records. The documents are suff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Limitation Act, 1963 is now settled by the Hon'ble Supreme Court in recent judgments such as in the matter of "Sesh Nath Singh & Anr. vs. Baidyabati Sheoraphuli Co-Operative Bank Ltd. & Anr."- [Civil Appeal No. 9198 of 2019] passed on 22nd March, 2021 and then in Judgement in the matter of "Laxmi Pat Surana vs. Union Bank of India & Anr."- [Civil Appeal No.2734 of 2020] dated 26th March, 2021 and in "Asset Reconstruction Company (India) Ltd. vs. Bishal Jaiswal & Anr"- [Civil Appeal No. 323 of 2021] (with other Appeals) dated 15th April, 2021. The Hon'ble Supreme Court has dealt with its earlier judgments, and now it is quite clear that Sections 18 & 19 of the Limitation Act, 1963 and the other provisions of the Limitation Act, as far as may be apply to the proceedings under the 'I&B Code'. 7. In the matter of "Sesh Nath Singh & Anr." (supra), the Hon'ble Supreme Court mentioned, as under:- "63. Section 5 of the Limitation Act, 1963 does not speak of any application. The Section 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 pref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs before the NCLT and the NCLAT. The IBC does not exclude the application of Section 6 or 14 or 18 or any other provision of the Limitation Act to proceedings under the IBC in the NCLT/NCLAT. All the provisions of the Limitation Act are applicable to proceedings in the NCLT/NCLAT, to the extent feasible. 68. We see no reason why Section 14 or 18 of the Limitation Act, 1963 should not apply to proceeding under Section 7 or Section 9 of the IBC. Of course, Section 18 of the Limitation Act is not attracted in this case, since the impugned order of the NCLAT does not proceed on the basis of any acknowledgment. …………………………………………………………………… 88. An Adjudicating Authority under the IBC is not a substitute forum for a collection of debt in the sense it cannot reopen debts which are barred by law, or debts, recovery whereof have become time barred. The Adjudicating Authority does not resolve disputes, in the manner of suits, arbitrations and similar proceedings. However, the ultimate object of an applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Babulal Vardharji Gurjar" (supra), the Hon'ble Supreme Court has held that Section 18 of the Limitation Act, 1963 is not applicable to an Application under Section 7 of the 'I&B Code' is misconceived. 10. In the judgment in the matter of "Asset Reconstruction Company (India) Ltd. vs. Bishal Jaiswal & Anr" (supra) also, the Hon'ble Supreme Court mentioned in Para 8, as under:- "7. From the above, it is clear that the principle of Section 9 of the Limitation Act is to be strictly adhered to, namely, that when time begins to run, it cannot be halted, except by a process known to law. One question that arises before this Court is whether Section 18 of the Limitation Act, which extends the period of limitation depending upon an acknowledgement of debt made in writing and signed by the corporate debtor, is also applicable under Section 238A, given the expression "as far as may be" governing the applicability of the Limitation Act to the IBC. 8. The aforesaid question is no longer res integra as two recent judgments of this Court have applied the provisions of Section 14 and Section 18 of the Limitation Act to the IBC….." After observations made as above, the Hon'ble Suprem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sposed with the matter of "Asset Reconstruction Company (India) Ltd. vs. Bishal Jaiswal & Anr". (A) In Civil Appeal No. 3 of 2021 which was before the Hon'ble Supreme Court, what appears is that the NCLT had admitted Application under Section 7 of the 'I&B Code'. This Appellate Tribunal held that the entry in Balance Sheet will not amount to an acknowledgment. The Hon'ble Supreme Court in Civil Appeal No. 323 of 2021 found that the Balance Sheet could be looked into for the purpose of acknowledgment. The Counsel for the Appellant- Financial Creditor in Civil Appeal No. 3 of 2021 argued that the Appeal should be remanded to NCLAT for decision on the point of limitation. In Para Nos. 2 & 3, the Hon'ble Supreme Court observed as under:- "2. Shri Jayesh Dolia, learned advocate appearing on behalf of the respondents, argued that since service was not effected on the respondents, nobody was present before the NCLT when it passed an ex parte order admitting the Section 7 application. In any event, he argued, that on the facts of this case, time began to run at least in 2002, and an application filed in 2019 obviously cannot be said to be within limitation, as the three-year period under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment was reserved, it was pointed out acknowledgment of liability in Balance Sheet for the year 2014-15 was there. It was claimed that written submissions were not taken into consideration. Learned Senior Counsel for the Respondent Shri C.A. Sundaram argued that the written submissions can never be substituted for pleadings, and if pleadings are deficient, there ends the matter. The Learned Senior Counsel for the Appellant Shri Rohatgi presented an application before the Hon'ble Supreme Court to amend the pleadings, stating that this can be allowed even at this stage, as per the judgments of the Hon'ble Supreme Court. The Hon'ble Supreme Court directed in Paras 6 and 7 of the Judgment, as under:- "6. There can be no doubt whatsoever that the appellant has been completely remiss and deficient in pleading acknowledgement of liability on the facts of this case. However, given the staggering amount allegedly due from the respondents, we afford one further opportunity to the appellant to amend its pleadings so as to incorporate what is stated in the written submissions filed by it before the NCLAT, subject to costs of ₹ 1,00,000/- to be paid by the appellant to the respondents w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 10710/2018 before the Hon'ble Supreme Court. The Hon'ble Supreme Court observed in Paras 24 & 25, as under:- "24. In the order dated 26.02.2019, this Court took note of the fact that in appeal before the Appellate Tribunal, one of the grounds agitated was that the claim of the respondent was barred by time for, admittedly, the default was committed on 08.07.2011 whereas the application was filed in the month of March, 2018. 25. After noticing that the principal issue relating to limitation, though raised by the appellant, was not even decided by the Appellate Tribunal; and after referring to the decision in B.K. Educational Services Pvt. Ltd. v. Paras Gupta & Associates: AIR 2018 SC 5601, wherein it was held that the Limitation Act is applicable to application filed under Section 7 of the Code, this Court remanded the matter to the Appellate Tribunal for deciding the issue of limitation with respect to the application in question in accordance with law while setting aside the impugned order dated 17.09.2018 and while granting liberty to the parties to submit additional affidavit/s in support of their respective contentions. This Court observed and ordered, inter alia, as u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when the matter was remanded by the order of the Hon'ble Supreme Court dated 26th February, 2019, this Tribunal had in order dated 14th May, 2019 dealt with the issue of limitation. The Hon'ble Supreme Court in these set of facts observed that the foundation with regard to acknowledgment had not been laid. 17. Now keeping in view the different orders passed by the Hon'ble Supreme Court while disposing the matter with regard to "Asset Reconstruction Company (India) Ltd. vs. Bishal Jaiswal & Anr" it shows that the pleadings can be brought on record or amended even at the NCLAT stage. 18. 'Law of Pleadings in India' by Mogha (18th Edition) shows that the pleadings are statements in writing drawn up and filed by each party to a case, stating what his contentions will be at the trial/ hearing and giving all such details as his opponent needs to know in order to prepare his case in answer. According to learned Author, in pleadings, material facts should be stated 'in a concise form'. The pleadings should be concise as well as precise. Pleadings would include contentions raised in Application, Counter, Appeal, Reply, Rejoinder. 19. Keeping in view the principles with regard to pleadin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AMOUNT Current Maturities of Long Term Debt* 2,54,17,53,662 Interest due but not paid 85,15,72,561 Instalment Due but not paid 66,40,78,936 Total 4,05,74,05,159 Note:*include secured loan of ₹ 61,87,26,361 We hope you will find the above in order. For Amzen Machines Pvt. Ltd. Sd/- Authorizes Signatory" 22. The reply filed by the Corporate Debtor (Annexure-3, Page 336) which was filed before the Adjudicating Authority clearly shows that the Corporate Debtor had specifically raised issue with regard to limitation and made reference to Section 348A as well as judgments on which the Appellant wants to rely and the issues were specifically raised and the Adjudicating Authority in impugned order considered the issue with regard to limitation and recorded finding as in para 8 (refers supra). Thus, it is not the case where foundation has not been laid. There were pleadings before the Adjudicating Authority. The format has been prescribed by the statute and the Bank had clearly while filing details pointed out even the acknowledgment and had attached the documents. When all this is there, there is no substance in the arguments raised before us that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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