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TMI Blog2022 (5) TMI 717X X X X Extracts X X X X X X X X Extracts X X X X ..... The Adjudicating Authority did not commit any error in holding that section 9 application of Appellant was barred by limitation - appeal dismissed. - Company Appeal (AT) (Insolvency) No. 222 of 2021 & I.A. No. 1819 of 2021 - - - Dated:- 13-5-2022 - (Justice Ashok Bhushan The Chairperson And (Dr. Alok Srivastava) Member (Technical) For the Appellant : Ms. Sheetal Parkash, Mr. Durgaprasad Halwai, Mr. Jayesh Desai Advocates For the Respondent : Mr. Manu Aggarwal, Mr. Hamesh Naidu and Mr. Shubham Bhudiraja, Advocates JUDGMENT ( Virtual Mode ) [ Per. : Dr. Alok Srivastava , ( Member Technical ) ] 1. The present Appeal has been filed by the Appellant aggrieved by the order dated 27.1.2021 (hereinafter called impugned order ) passed by the Adjudicating Authority (National Company Law Tribunal, Ahmedabad Bench) in Company Petition No. IB (AHM)/555 of 2018. 2. The Appellant, who is an operational creditor of the corporate debtor The Baroda Rayon Corporation Limited is aggrieved by the Impugned Order by which the section 9 application under the Insolvency and Bankruptcy Code, 2016 (in short IBC ) filed by the Appellant has been rejected by the Adjudicating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued that the respondent sent fax dated 19.06.2006 and thereafter acknowledged receipt of his letters dated 25.10.2005, 20.12.2007, 5.6.2008, 15.6.2009, 7.10.2010, 4.6.2012, 8.7.2013, 9.9.2014, 29.5.2015, 3.7.2017 and 11.7.2017 wherein these letters carried receipts/endorsements from the Respondent along with the official rubber stamp of the respondent company. He has thus urged that an employee of the respondent has not only endorsed the said letters, but also in some endorsements entered the remark Received. Sent to Surat for payment by signing and affixing the company s rubber stamp, which shows that the Respondent acknowledged the owed debt and was promising to pay the operational debt. She has further submitted that the Respondent admitted finally its liability vide letter dated 21.10.2015, and in this letter he has admitted that part payments were made to the Appellant and the Respondent owes a debt which it promises to pay. 6. The Learned Counsel for Appellant has, therefore, claimed that vide letter dated 21.10.2015, the acknowledgment and confirmation of the balance amount is akin to promise to pay and any written acknowledgment after the confirmation of the balance am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent company was a sick company and under SICA the Appellant right to move against the Respondent company for recovery of debt was suspended. Hence, the relevant period should not be counted for the purpose of limitation. 10. In reply, the Learned Counsel for Respondent has argued that it is the admitted case of the Appellant that the invoices on the basis of which the Appellant has claimed operational debt due pertain to the year 2004 and whereafter the Appellant has sought to rely upon remarks on receiving the various document to contend that section 9 application is not barred by limitation. The Learned Counsel for Respondent has claimed that the documents, on whose basis the Appellant has tried to show that the debt was acknowledged by the Respondent, are forged and fabricated and cannot be relied upon. He has further contended that even in the event that these documents are accepted to be genuine the remarks thereon do not show acknowledgment of the debt by the Respondent and therefore the section 9 application is barred on the ground of limitation. 11. The Learned Counsel for the Respondent has given the following reasons why the documents produced by the Appellant s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mere receipt of the letters in Mumbai office of the Respondent and forwarding them to Surat office by an employee who is a peon, cannot be considered as valid acknowledgment as is required under section 18 of the Limitation Act for extension of limitation for the application under section 9 of the IBC. He has further argued that Mr. Janardan R. Devrukar, who was working with the Respondent only as a peon on contractual basis from the year 2000 till 2008, had no valid authority to give any acknowledgment on behalf of the Respondent company and even assuming that he had such an authority, no such authority continued after 2008, when Mr. Janardan R. Devrukar had demitted office from the contractual post of peon too. Further, he has stated that the last endorsement referring to payment was allegedly made in the letter dated 7.10.2010 and the next acknowledgment in letter dated 21.5.2015 has been issued after more than 3 years from this date and therefore it cannot extend the period of limitation as required under section 18 of the Limitation Act. 13. The Learned Counsel for Respondent has also controverted the reliance placed by the Appellant on section 25 (3) of the Indian Contract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.2007 (attached at page 126 of the appeal paperbook, Vol. I) also has the remarks Received on 20.10.2007. Sent to Surat for payment. -Signed , There are letters dated 5.6.2005, 15.6.2009, 7.10.2010, 4.6.2012 where similar remarks had been made by the person receiving the letters. The letters dated 8.7.2017, 9.9.2014, 29.5.2015, 11.7.2017 and 23.7.2017 are purportedly received by some employee of the Respondent company, whose name is not clear. We then find that a letter dated 21.10.2015 has been issued by Shri Ramesh J. Vohra,(attached at page 2010 of the appeal paper book vol.I) wherein a liability of Rs 39,00,631.50 is booked and confirmed and it is also mentioned that 18% interest on the dues are in the process of approval with the top management. 16. The Hon ble Supreme Court has held in the matter of Assets Reconstruction Company Private Limited vs. Bishal Jaiswal (supra) that the acknowledgment by the Corporate Debtor should be clear and unambiguous and only then it can be considered as an acknowledgment as required under section 18 of the Limitation Act for the purpose of extending limitation for an application under IBC. Moreover, in the said matter the ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his application. Therefore, the appellant/Operational Creditor cannot put the onus of producing the balance sheets on the Corporate Debtor. 19. We note that the documents provided by the Appellant in support of his application are as mentioned earlier in this judgment and attached at pp.38-161 of the appeal paperbook, Vol.I. As has been discussed earlier in this judgment, the documents do not show any clear acknowledgement of the operational debt that is due. 20. We now examine the claim of the Appellant that as per section 25 (3) of the Indian Contract Act where there is a promise to pay which amount to acknowledgement of the debt. He has adverted to the judgment of State Bank of India vs. Kanahiya Lal Anr. (supra) to claim that the promise to pay under section 25 of the Indian Contract Act, 1872, is a sufficient acknowledgement as required under section 18 of the Limitation Act, and such promise provides lead of life to the limitation of section 9 application. Para 24 of this judgment states as follows:- 24. No doubt, there is a distinction between an acknowledgment under section 18 of the Limitation Act and a promise under Section 25(3) of the Indian Contract A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r an acknowledgment of liability has, in fact, been made, thereby extending limitation under Section 18 of the Limitation Act. 22. The above elucidation by Hon ble Supreme Court implies that there should be unequivocal or clear-cut acknowledgment of the debt which we do not find in various letters and faxes produced by the operational creditor mere receipts by a peon employed with the corporate debtor, who demitted office in 2000 and worked on contractual basis during the period 2000-2008, cannot be considered as sufficient, proper and unequivocal acknowledgement of the operational debt. 23. The Learned Counsel of Respondent has referred to the judgment of this tribunal in the matter of Mazda Agencies (partnership firm) through its partner Mr. Rakesh Desai vs. Hemant Plastics Chemicals Ltd. (2021 SCI online NCLAT 69) to claim that as per section 20(5) of the Sick Industrial Companies( Special Provision) Act, 1985 (in short SICA ), the Appellant was not entitled to get exclusion of the time spent under SICA proceedings in computing the period of limitation. This Tribunal held in paragraph 20 of this judgment as follows:- The appellant was not part of the scheme and t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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