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TMI BlogLimitation Act and the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC),2016.X X X X Extracts X X X X X X X X Extracts X X X X ..... National Company Law Appellate Tribunal (NCLAT), allowing Company Appeal (AT) (Insolvency) No.407 of 2019, by the Respondents,i.e. C Shivakumar Reddy Anr. /Corporate debtor under section 7 of IBC. The NCLAT held that the petition of the appellant bank/Dena Bank under section 7 of the IBC was barred by limitation. On 23rd December, 2011 the Appellant Bank/Dena Bank had sanctioned Term Loan and Letter of Credit Cum Buyers Credit in favour of the Corporate Debtor, with an upper limit of ₹ 45.00 Crores.The Corporate Debtor had to pay back this loan within a period of eight (8) years. Accordingly there was a deposit of title deeds of the immovable property with the Appellant Bank. On 20th September, 2013 the Corporate Debtor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the Corporate Debtor for recovery of ₹ 52,12,49,438.60 with future interest at the rate of 16.55% per annum, from the date of filing the application till the date of realization, in the form of a Recovery Certificate. The Counsel for the Bank alleged, that the Corporate Debtor had, in its Annual Reports for the financial years 2016- 2017 and 2017-2018, acknowledged its liability in respect of the loan taken by it from the Appellant Bank. On 1st October 2018, the Appellant Bank issued a Demand Notice to the Corporate Debtor under 2016 Adjudicating Authority Rules , or the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 . The Appellant Bank later filed the Petition i.e. CP(IB) No.244/BB/2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reme Court on a question of law arising out of such order under this Code within forty-five days from the date of receipt of such order. The prima facie issue which arose for consideration of hon'ble Supreme Court, in the appeal u/s. 62 is whether NCLAT has erred in law in arriving at the conclusion that the Petition filed by the Appellant Bank under Section 7 of the IBC was barred by limitation, culminating into setting aside the order dated 21st March 2019. Another question is whether a final judgment and decree of the DRT in favour of the Financial Creditor, or the issuance of a Certificate of Recovery in favour of the Financial Creditor, would give rise to a fresh cause of action to the Financial Creditor to initiate proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is perverse or otherwise warrants intervention of the hon'ble supreme court in a second appeal. Further the actions before the adjudicating authority/NCLT were challenged as in there was a belated filing of documents an action ought not to have been allowed by the court of first instance,i.e. NCLT/adjudicating authority. Moreover there was an interim application filed by the Bank and new set of facts were introduced. This liberty was granted only to file a gist of the case and some orders/judgments. However the Appellant Bank in abuse of the process of the Tribunal, filed I.A. No. 131 of 2019, introducing a whole new set of documents and setting up an entirely new case for extension of limitation, on the ground of alleged acknowle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2019 (9) TMI 1019 - Supreme Court , a proposal for One Time Settlement cannot be construed as an acknowledgment of debt for the purpose of Section 18 of the Limitation Act . Finally the certificate of recovery as issued by DRT cannot be linked to a Petition under section 7 IBC. There could be no question of reckoning limitation from the date of failure to make payment in terms of the Recovery Certificate. HELD THAT: The hon'ble court referred to its own judgment of Swiss Ribbons Pvt. Ltd. And Anr. Versus Union of India And Ors. - 2019 (1) TMI 1508 - Supreme Court as the primary focus of the legislation is to ensure revival and continuation of the corporate debtor by protecting the corporate debtor from its own m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , that the NCLAT coming to the decision as to nothing on record to suggest that the Corporate Debtor acknowledged the debt within three years and agreed to pay debt is unsustainable in law. The principles of limitation should apply to an application under Section 7 of the IBC which enables a financial creditor to file an application initiating the Corporate Insolvency Resolution Process (CIRP)against a Corporate Debtor before the Adjudicating Authority, when a default has occurred. On a conjoint reading of the provisions of the IBC quoted above, it is clear that a final judgment and/or decree of any Court or Tribunal or any Arbitral Award for payment of money, if not satisfied, would fall within the ambit of a financial debt, enabli ..... X X X X Extracts X X X X X X X X Extracts X X X X
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