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TMI Blog2022 (4) TMI 942X X X X Extracts X X X X X X X X Extracts X X X X ..... lement of the accounts. Thus, the Application filed on 10.06.2020 is within three years of the last date of acknowledgment and hence is not barred by Limitation. Appeal allowed. - COMPANY APPEAL (AT) (INSOLVENCY) No. 341 of 2021 - - - Dated:- 18-4-2022 - [Justice Anant Bijay Singh] Member (Judicial) And [Ms Shreesha Merla] Member (Technical) For the Appellant : Mr. Rajeev Kumar Yadav, Advocate For the Respondent : None JUDGEMENT ( Per : Shreesha Merla , Member ( T ) ) 1. Challenge in this Company Appeal (AT)(Insolvency) No.341/2021 is Impugned Order dated 10/11/2020 in C.P. No. IB-866/ND/2020 passed by the Learned Adjudicating Authority (National Company Law Tribunal, New Delhi, whereby the Adjudicating Authority has dismissed the Application filed under Section 7 of the Insolvency Bankruptcy Code, 2016 (Hereinafter referred to as the The Code ), as being barred by Limitation. 2. Succinctly put, the facts in brief are that the Appellant, M/s PEC Ltd, the Financial Creditor has financed the Corporate Debtor for procurement of iron ore lumps and sized ore not exceeding an amount of ₹ 10 crores and executed an Associateship Agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... calling upon the Respondent to repay a sum of ₹ 26,69,23, 769/- for which the Respondent replied on 12.04.2017 wherein once again, the Respondent acknowledged the financial obligations. It is the case of the Appellant that despite these acknowledgements in the email dated 29.09.2014, Minutes of Meeting dated 23.09.2016 and the cheques dishonoured read with Reply to the Notice dated 12.04.2017, all of which fall within the ambit of the Section 18 of the Limitation Act, 1963, the Learned Adjudicating Authority has not considered the ratio of the Hon ble Supreme Court in catena of Judgements and has dismissed the Application. The Learned Counsel for the Appellant has relied on the following judgements:- a) Yogesh Kumar Jashwantlal Thakkar Vs Indian Overseas Bank and Ors MANU/NL/0341/2020 b) Rajesh Kumar Vs Prem Chand Jain AIR 1998 Delhi 80 c) V.K. Abdul Rahim Vs The Federal Bank Ltd Anr, Company Appeal (AT) (Insolvency) No.1297 of 2019 d) Bank of India Vs Multi Arc Coating and Straps Ltd; Company Appeal (AT)(Insolvency No.891/2019 e) Malti Arc Coating and Straps Ltd Vs Bank of India; Civil Appeal No.2195/2020 f) RR Gopaljee Vs Indian Overseas B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we noticed that at page 376, it is mentioned that Corporate Debtor had proposed for settlement of the account and on the basis of that Ld. Counsel for the petitioner submitted that the Corporate Debtor has acknowledged the debt by sending the reply to the Legal Notice issued under Section 138 of the NI Act and we also noticed that in its reply to the Legal Notice issued under Section 138 of the NI Act, in para 6 of the reply, which is at page 374 of paper book, it is mentioned that undated cheques were handed over to the petitioner and that is the reasons the date, when the cheques were handed over to the petitioner are not disclosed in the notice. Therefore, at this juncture, we would like to examine this fact that whether the petitioner has mentioned in its application, the date when the petitioner received the cheque, we have gone through the application and the averments made in the petition and we noticed that at page 7 in para 12, the petitioner has mentioned that the Corporate Debtor had handed over four cheques, each of ₹ 4 Crore but no where the petitioner has mentioned that the date, when the cheques were handed over to the petitioner by the Corporate Debtor, of cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on 30.06.2013 and acknowledgement also must have been made within that period. 34. At this juncture, we would like to refer the submissions of the petitioner s counsel, who has placed reliance upon the reply to the legal notice dated 02.03.2017, which is much after the 3 years, therefore, even if we accept the contention of the petitioner that reply which was given in response to the legal notice under Section 138 of NI Act will be treated as an acknowledgement of debt, the same has also been made after three years from the date of execution of last agreement, whereas in view of Section 18 of the Limitation Act, the acknowledgement must be made within the period of limitation, hence, we are unable to accept the contention of the Ld. Counsel for the petitioner that the present application is within time. 6. We are of the considered view that this Appeal be decided on the touchstone of the ratio of the Hon ble Supreme Court in the case of Asset Reconstruction Company (India) Ltd V. Bishal Jaiswal 2021 SCC OnLine SC 321 and the preposition laid down in Dena Bank (now Bank of Baroda) Vs. C. Shivakumar Reddy and Another (2021) 10 Supreme Court Cases 330. 7. The Addendum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would ensure that all dues were repaid to M/s PEC Limited. It is stated that Our Client No.1 has never run away from the fact that it has dues pending, nor has our Client No.1 ever by words or actions communicated that it had/has no intention to repay them. On the other hand Our client No.1 has constantly sought out meetings and discussions with concerned personnel regarding the same and has always kept M/s PEC Limited up to date with all happenings and issues and sought the help and assistance to M/s PEC Limited on the same. c) In fact, M/s PEC Limited has full knowledge of the fact that the cargo as envisaged under the Agreement dated 01.07.2012 was sought to be used in a plant owned by a known concern, i.e. M/s Maa Tarini Industries Limited, which concern also saw a huge downturn in business given the slow down in the steel industry which in turn impacted Our Client No.1 We would like to reiterate that there has always been full disclosure and updating by our Client No.1 regarding all aspects to M/s PEC Limited. In fact all facts are completely known to M/s PEC Limited since Maa Taarini Industries Limited has also sought financial assistance from M/s PEC Limited. Thus all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The liability was shown in the balance sheet as on 31 st March, 2002. The assessee being a limited company, this amounted to acknowledging the debts in favour of the creditors. Section 18 of the Limitation Act, 1963 provides for effect of acknowledgement in writing. It says where before the expiration of the prescribed period for a suit 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, a fresh period of limitation shall commence 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 : 1991 Supp (1) SCC 402, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, I may refer to only one decision of the learned single judge of this Court (Manmohan, J.) in Bhajan Singh Samra V Wimpy International Ltd.. 185 (2011) DLT 428 for the simple reason that it collects all the relevant authorities on the issue, including some of the judgments cited before me on behalf of the petitioners. This judgment entirely supports the petitioners on this point. 14. To reiterate, Learned Adjudicating Authority has recorded in para 32 of the Impugned Order as follows: At this juncture, we would also like to refer the part-4 of the application and we notice that date of default is not shown rather it is mentioned that the detailed working for computation of the amount and default (in days) is annexed herewith as Annexure -K and Annexure K, which is from 80 to 84. We noticed that there is no specific date of default is mentioned rather the petitioner has referred the balance sheet for the different financial years and on the basis of that the petitioner is claiming since the amount is shown in the balance sheet, therefore, the date of default, is the date mentioned in the balance sheet. While the Adjudicating Authority has clearly referred t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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