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TMI Blog2021 (12) TMI 628X X X X Extracts X X X X X X X X Extracts X X X X ..... e by Corporate Debtor . Continuing further, it is to be remembered that the Respondent/Financial Creditor had addressed Reply letter to the Corporate Debtor dated 19.02.2018 for One Time Settlement of the loan amount which was accepted by the Respondent based on Terms and Conditions specified in the Sanction Letter dated 28.02.2018 - It cannot be gainsaid that the Respondent/Financial Creditor, after considering the proposal of the Appellant for One Time Settlement through its letter dated 19.02.2018 granted said settlement in and by which the Corporate Debtor was required to pay ₹ 2 Crores as against its liability of ₹ 17.12 Crores as on 01.12.2015. As such it is crystalline clear that the new contract had come into play on 19.02.2018 and further that the Application was filed by the Respondent/Applicant (under Section 7 of IBC) on 25.10.2018 which is within period of limitation. The OTS proposal of the Corporate Debtor dated 28.02.2018 was accepted by the authorised signatory of the Corporate Debtor to the Terms and Conditions and it is brought to the fore that through a letter dated 07.06.2018 of the Respondent/Financial Creditor/Applicant addresse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the FC and the CD. From the said proposal it appears that the proposal was sent by the CD on 19.02.2018 for one time settlement of the financial debt. It was considered and accepted by the FC with regard to the existing liability subject to the terms and conditions as contained in the Annexure to the said OTS Proposal dated 28.02.2018. This OTS proposal has been accepted along with all the terms and conditions by the authorised signatory of the CD. The record also has another letter dated 07.06.2018 issued by the FC to the CD conveying revocation of the said OTS letter due to non-payment of the settlement amount by the CD despite lapse of considerable time. Further, copy of Balance Sheet for the Financial Year 2017-18 also shows that secured borrowings include IDBI Cash Credit amount of ₹ 76,99,61,821/- and Indian Bank Cash Credit amount of ₹ 41,68,13,000/-. The Balance Sheet is duly stamped and signed by the Auditor as well as Board of Directors of the CD. 11. Since the Balance Sheets for Financial Year 2017-18 clearly show the secured borrowings from the Financial Creditors, which constitutes acknowledgment of debt, we do not find any merit in the contention of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that there was Acknowledgment of Liability within three years w.e.f. 04.04.2013 and the Notice under Section 13(2) of SARFAESI Act, 2002 was issued and the Account was classified as NPA on 30.06.2012. 7. The Learned Counsel for the Appellant refers to the Judgment of the Hon ble Supreme Court in the matter of Dena Bank (Now Bank of Baroda) V. C. Shivakumar Anr. (vide Civil Appeal No. 1650 of 2020 dated 04.08.2021) wherein at paragraph it was held that the IBC 206 is designed to ensure that the business/or commercial Activities of the Corporate Debtor are continued by Resolution Professional post imposition of Moratorium which would give the Corporate Debtor from reprieve from coercive litigation which would drain the Corporate Debtor of his financial resources. 8. The Learned Counsel for the Appellant refers to paragraph 79 of the Judgment of the Hon ble Supreme Court in Dena Bank s case (as mentioned supra) wherein it is observed that IBC is essentially statute which works towards a revival of the Corporate Debtor to enable to pay its debts by appointment of Resolution Professional. The Learned Counsel for the Appellant proceeds to take a stand that the inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Liability may be sufficient although it omits to specify the exact nature of the property or right or averse that time for payment, delivery, performance, enjoyment, has not arrived or is accompanied to refusal to pay, deliver, perform or permit to enjoy or is coupled with claim to set off or is addressed to a person other than a person who is entitled or right. 16. The Learned Counsel for the Respondent submits averse to the decision of the Hon ble Kerala High Court in P.D.Pillai v. Mrs. Kaliyani Kutty Amma (1994 SCC Online Ker 139) wherein the full Bench of the High Court of Kerala observed and held: .. An Acknowledgment does not require to be specific and direct. The substance of the decisions appear to be that it is not necessary that there should be a specific and direct acknowledgment of the particular liability which is sought to be enforced, but if there is an admission of facts of which the liability in question is a necessary consequence, there would be an acknowledgment within the meaning of section 18 of the Limitation Act. What is necessary is admission of the existence of a debt, a liability for contribution in case a part of it is paid and such an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sanction Letter dated 28.02.2018. Furthermore, the Corporate Debtor depending upon said settlement, made an upfront payment as seen in the One Time Settlement letter by agreeing all the terms and conditions of the sanctioned, signed the said sanctions. 21. The Learned Counsel for the Respondent points out that the Appellant had acknowledged its liability in a consistent manner from the year 2013 upto 2018, during which years, the Application was filed, within the limitation period as specified under Article 137 of the Limitation Act, 1963. 22. The Learned Counsel for the Respondent brings out to the notice of this Tribunal that the Respondent filed O.A. No. 40 of 2015 before the Debt Recovery Tribunal No. 1, Hyderabad (in short DRT ) against the Appellant towards the recovery of ₹ 24,21,74,776.21 and the same was decreed by the Tribunal on 24.10.2018 and indeed the said decree of the DRT is to be taken into account by this Tribunal. 23. The Learned Counsel for the Respondent/Financial Creditor relied on the decision of the Hon ble Supreme Court in the matter of Committee of Creditors of Essar Steel India Ltd. V. Satish Kr. Gupta and Ors. (vide Civil Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the concept of novation is the substitution of a contract by a new one only through the consent of both the parties to the same. Such consent may be expressed as in written agreements or implied through their actions or conduct. In other words, the novation of contract compromised of two elements. First is the discharge of one debt or debtor and the second is the substitution of a new debt or debtor. The novation is not complete unless its results in substitution, rescission or extinguishment of the previous contract by the new contract. The terms and conditions therefore were, therefore required to be complied with by both the parties. Terms and conditions of the contract can indisputably be altered or modified. They cannot, however, be done unilaterally unless there exists any provision either in contract itself or in law . 28. One cannot brush aside an important fact that the Respondent/Financial Creditor/Applicant in O.A. No. 40/2015 on the file of DRT, Hyderabad on 24.10.2018 had obtained a decree against the Appellant for recovery of ₹ 24,21,74,776.21 which confers a fresh cause of action to the Respondent/Financial Creditor/Applicant to initiate CIRP against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity , after analysing the facts and circumstances of the case, had admitted the Application filed by the Respondent/ Corporate Debtor by passing the Impugned Order which suffers no infirmity in law. 30. ACKNOWLEDGMENT OF LIABILITY: It is relevantly pointed out that An Acknowledgment of Liability points out that an individual who acknowledges has some kind of interest, which is undoubtedly bound by his statement. No wonder An Acknowledgment of Liability ought to involve an admission of a subsisting jural relationship between the parties and further that an intention to continue such a relationship till it comes to end in legal manner. Moreover, kind of jural relationship that should exist is that the individual making an acknowledgment should be under an existing liability to the other person as per the decision of Nallathambi Nadar v. Ammal Nadachi reported in AIR 1964 Mad. 169 at pages 171, 172 (Full Bench). 31. The object of Section 18(2) of the Limitation Act, 1963 is to ascertain the real date written and signed acknowledgment for the purpose of saving limitation and to exclude fraudulent testimony. Apart from that, unconditional acknowledgment is an implie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee of EARC Trust SC-130) is described in the Tabular Column as under: Facility Principal Total as on 31.10.2014 Additional interest Additional Penal Interest Repayment Total dues as on 31.08.2018 Cash credit 6,49,96,454.72 10,29,94,086.70 7,77,32,482.49 1,05,39,685.42 62,29,106.90 18,50,37,147 LC (devolve d) 2,46,83,476.50 4,14,97,874.50 3,70,47,540.49 44,23,434.37 36,80,987,97 7,92,87,861.39 Expense s 50,000.50 51,584.00 38,321.14 - 89,505.10 - Total 8,97,29,931.32 14,45,43,545.20 11,48,18,348.12 1,49,63,119.79 1,00,00,000.00 26,43,25,009.11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... letter dated 09.04.2013. 44. It is to be borne in mind that the Respondent/Financial Creditor/ Applicant had given a Reply on 30.03.2016 for the proposed One Time Settlement made by Corporate Debtor . Continuing further, it is to be remembered that the Respondent/Financial Creditor had addressed Reply letter to the Corporate Debtor dated 19.02.2018 for One Time Settlement of the loan amount which was accepted by the Respondent based on Terms and Conditions specified in the Sanction Letter dated 28.02.2018. Apart from this, based on the said settlement, Corporate Debtor had paid an upfront amount as seen from the One Time Settlement letter by agreeing to abide by the Terms and Conditions of the Sanction Letter and signed it. 45. It cannot be gainsaid that the Respondent/Financial Creditor, after considering the proposal of the Appellant for One Time Settlement through its letter dated 19.02.2018 granted said settlement in and by which the Corporate Debtor was required to pay ₹ 2 Crores as against its liability of ₹ 17.12 Crores as on 01.12.2015. As such it is crystalline clear that the new contract had come into play on 19.02.2018 and further tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed signatory of the Corporate Debtor to the Terms and Conditions and it is brought to the fore that through a letter dated 07.06.2018 of the Respondent/Financial Creditor/Applicant addressed to the Corporate Debtor , the OTS Letter was revoked because of the non-payment of settlement sum by the Corporate Debtor in spite of there being loss of time. Suffice to it, to the Tribunal to point out that in the present case, as per new contract, the Corporate Debtor , apart from the fact that it paid ₹ 1 crore, committed a default in regard to the upfront payment of sum of ₹ 9 Crores in response to the settlement of loan amount and in any event, in law, the new promise had given new cause of action enabling the Respondent/ Corporate Debtor /Applicant to initiate CIRP under IBC resulting in filing of Application under Section 7 of IBC against the Corporate Debtor , which is well within period of limitation. Viewed in that perspective, the counter plea in regard to the aspect of limitation fails. 50. In the light of foregoing detailed discussions, this Tribunal also, taking into consideration of the entire facts and circumstances of the instant case in a conspectu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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