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TMI Blog2021 (12) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd unerringly pointed out that the Corporate Debtor had admitted its liability and had prayed for the OTS of Credit Facility and mooted an abnormal offer of ₹ 8.15 Crores on 11.01.2019 towards the Full and Final Settlement of all the outstanding liabilities with the Bank , which was approved by the Bank as per its Sanction Letter dated 22.01.2019 which was accepted by the Corporate Debtor on 24.01.2019. But the fact of the matter is that the Corporate Debtor had prayed for time till 20.02.2019 for payment of 5% advance sum under the OTS scheme and indeed, the Corporate Debtor in accordance with the OTS was to repay the liabilities of the Respondent No. 1/Bank by 30.06.2019. Therefore, in the instant case, the default is on 30.06.2019. It is well settled that it is not for the Adjudicating Authority to arrive at the quantum of the outstanding amount due to be paid by the Corporate Debtor to the Financial Creditor . It is to be remembered that IBC, 2016 is not a Debt Enforcement Procedure - the proceedings under IBC are summary in nature and not an adversary one. Suffice it for this Tribunal to relevantly point out that the proceedings under IBC a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uent for admission of a petition and admitted the petition by declaring moratorium etc. APPELANT S CONTENTIONS: 3. According to the Learned Counsel for the Appellant the Corporate Debtor / Trivandrum International Health Services Ltd engaged in the business of Health Care Services for its expansion under the dream project of Multi-Specialties Cancer Block approached Respondent No. 1/ Financial Creditor for financial support in the form of loan and submitted relevant documents. The Respondent No. 1/Bank on the request of the Corporate Debtor and upon consideration of relevant documents sanctioned the credit facility through a sanctioned letter dated 13.02.2015. 4. It is represented on behalf of the Appellant that a Master Credit Agreement dated 31.03.2015 was executed by the Appellant Company in favour of Respondent No. 1 at Trivandrum. Besides this a Term Loan Agreement dated 31.03.2015 and Overdraft Cash Credit dated 31.03.2015 and other documents were executed between the parties. 5. The Learned Counsel for the Appellant brings to the notice of this Tribunal that a Demand Promissory Notes dated 31.03.2015 was executed by the Corporate Debtor for ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 by expressing its interest in the proposal submitted by the Corporate Debtor . 10. The Learned Counsel for the Appellant submits that the Corporate Debtor had brought for OTS of credit facility and proposed a final offer of ₹ 8.15 Crores as full and final settlement and the said settlement proposal was dated 11.01.2019, which was approved by the Respondent No. 1/ Financial Creditor and a Sanction Letter dated 22.01.2019 was approved by the Respondent No. 1/Bank which was accepted by the Corporate Debtor but sought time to pay 5% of the advance. 11. It transpires that the Respondent No. 1/Bank had filed, before the Adjudicating Authority an Application in IBA/51/KOB/2019 (under Section 7 of IBC) seeking to initiate Corporate Insolvency Resolution Proceeding (in short CIRP ) against the Corporate Debtor /Trivandrum International Health Services Ltd wherein it claimed a total default sum of ₹ 14,24,90,488/- as on 30.11.2019 specifying the date of default as 30.06.2019. 12. It is brought to the fore that the Memorandum of Deposit of Title Deeds executed by Trivandrum International Health Services Limited, Corporate Debtor with respect to 80 cents in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itor and other lenders in the presence of Hon ble Finance Minister, Kerala, to discuss on Restructuring of the loan facility and repayment of arrears and thereafter, on 06.12.2018, sent a letter proposing OTS of credit facility, which was approved by the Respondent No. 1/Bank in principle as per Sanction Letter dated 22.01.2019. In this regard, the Learned Counsel of the Respondent No. 1/Bank contends that these facts clinchingly indicate an acknowledgment for the purpose of Article 137 of the Limitation Act, 1963 giving rise a fresh period of limitation, to be reckoned from the date of acknowledgment . 18. The Learned Counsel for the Respondent No. 1/Bank to lend support to the contention that the revised OTS proposed is clearly acknowledgment of debt, refers to the decision of this Tribunal in Gauri Prasad Goenka Vs. Punjab National Bank Anr. (vide Company appeal (AT)(Insolvency) No. 28 of 2018 wherein at paragraph - 10 it is held as under: 10. That apart, there is acknowledgment of the outstanding debt on the part of the Corporate Debtor, a fact not disputed by the Corporate Debtor. This comes to fore from the letter dated 4th August, 2018 emanating f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... solution process under Section 7 of the Code enures. Section 18 of the Limitation Act would come into play every time when the principal borrower and/or the corporate guarantor (corporate debtor), as the case may be, acknowledge their liability to pay the debt. Such acknowledgment, however, must be before the expiration of the prescribed period of limitation including the fresh period of limitation due to acknowledgement of the debt, from time to time, for institution of the proceedings under Section 7 of the Code. Further the acknowledgment must be a liability in respect of which the financial creditor can initiate action under Section 7 of the Code. 20. The Learned Counsel for the Respondent No. 1 refers to the judgment of the Hon ble Supreme Court in Dena Bank (Now Bank of Baroda) Vs. Shiva Kumar Reddy Anr in Civil Appeal No. 1650 of 2020 wherein at paragraph114, 116, 141 142 it is observed as under: .. 116. In Asset Reconstruction Company (India) Limited v. Bishal Jaiswal and Anr. (supra) where this Court speaking through Nariman J relied, inter alia, on Sesh Nath Singh (supra) and Laxmi Pat Surana (supra) and held that the question of applicability of Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9, filed by the Respondent No. 1/Bank, before the Adjudicating Authority , on 10.12.2019, it is evident that the Respondent No. 1/Bank had issued sanction letter dated 30.03.2015 in favour of the Corporate Debtor approving Cash Credit Facility of ₹ 1.00 Crore and Term Loan Facility of ₹ 15.00 Crores subject to the terms and conditions thereof and the said sanction was amended by the letters dated 25.05.2015 and 08.07.2015 respectively. Also, that between the Parties, there is an agreement in respect of the loan and Memorandum of Deposit of Title Deeds was executed. 25. In respect of the Loan Promissory Notes were issued by the Corporate Debtor for ₹ 1 Crore and ₹ 15 Crore to and in favour of the Respondent No. 1/Bank ( Financial Creditor ). 26. There is no denial of the fact that because of the default committed by the Corporate Debtor in regard to the repayment of Credit Facility in violation of the sanctioned terms, loan documents, the Respondent No. 1/Bank had classified the accounts of the Corporate Debtor on NPA on 30.05.2016. It cannot be ignored that the Respondent No. 1/Bank, after issuing Demand Notice and also issued Notice u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anction letter was issued by it without prejudice to any right and remedies available to it and it reserves its right to proceed accordingly. 30. It is to be pointed out that an acknowledgement must relate to a present subsisting liability. The word occurring in Section 18 of the Limitation Act, 1963 means admission of the truth pertaining to one s own liability, which in turn may be expressed or employed. 31. In law, a writing to be acknowledgment of liability must involve an admission of a subsisting jural relation between the parties and conscious confirmation of an intention of affirming such relation in regard to an existing liability . 32. No wonder, an acknowledgement is an admission made by the maker that there is a debt to be paid by him, either to the recipient of the communication/letter or to other individual, on whose behalf the said communication is received. 33. In so far as filing of O.A. No. 156 of 2018 before the Debt Recovery Tribunal, Ernakulam (in short DRT ) by the Respondent No. 1/Bank is concerned, it is to be pointed out that the filing of an Application under Section 7 of the IBC by the Bank ( Financial Creditor ) is not barred. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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