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TMI Blog2021 (8) TMI 1347X X X X Extracts X X X X X X X X Extracts X X X X ..... he perusal of provisions of Section 18(1) of Limitation Act, 1963, it transpires that a fresh period of limitation in respect of live claim i.e. enforceable liability to pay subsisting as on the date of acknowledgement is obtained to initiate legal proceedings - In various judicial decisions, it has been held that provisions of Section 18 of Limitation Act, 1963 have to be construed liberally so that party having legal rights do not suffer by an unreasonable approach of the party liable to pay. It is also to be noted that explanation (a) defines that what could constitute as an acknowledgement of liability given in writing. In the present case, OTS proposal has been given in writing whereby the Corporate Debtor has requested to consider its position and accept a particular sum as full and final settlement of its liability towards the applicant-financial creditor. As per explanation (a), even a refusal to pay may amount to acknowledgement whereas in the present case a specific amount has been offered which by itself is sufficient to bring such proposal into the category of acknowledgement. Authorisation of person who filed this application - HELD THAT:- The Financial Creditor i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IBC, 2016 have been initiated in December, 2018. 4. Learned Counsel for the Financial Creditor appeared and Submitted that first. issue which was to be addressed was whether the application was filed within the limitation or not? In this regard, the Learned Counsel stated that it is not in dispute that the account of the Corporate Debtor had been classified as NPA on 29.10.2015 and application had been filed on 21.12.2018, hence, marginally beyond three years from the date of account being classified as NPA. However, such application is well within the limitation in view of Section 18 of the Limitation Ace 1963 for the reason that Corporate Debtor on 06.09.2018 had submitted One Time Settlement (hereinafter referred to as OTS ) proposal wherein not only debt had been acknowledged but its liability to pay had also been accepted. In this regard, Learned Counsel drew our attention to page 27 and 28 of additional rebuttal affidavit. Learned counsel also placed reliance on the decision of Hon'ble Supreme Court in the case of Dena Bank vs. C. Shivakumar Reddy and Ors in Appeal No. 1650 of 2020 dated 04.08.2021 reported in MANU/SC/0502/2021wherein the Hon'ble Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed. It was emphasized that in such circumstances, application was liable to be dismissed as not maintainable. He also drew our attention to the documents relied on by the Financial Creditor to counter this plea of the Corporate Debtor. Learned Senior Counsel further stated that the OTS proposal was for a definite amount and the Corporate Debtor was ready to pay the same even as on date, hence, only to this extent the effect of OTS proposal was to be taken cognizance. 6. In the rejoinder, Learned Counsel for the Financial Creditor stated that the Corporate Debtor could not approbate and reprobate at the same time i.e. either the Corporate Debtor should own or disown OTS proposal and it cannot take plea that certain part of this proposal were applicable and other arts were not applicable and not to be recognized. As regard to authority of the person, it was submitted that the Financial Creditor was a scheduled Bank and Bank booklet of delegation of authority/powers to its officers had been issued which was a general instruction and applicable for legal proceedings to be initiated for recovery of loans at various forums. He. emphasized to the fact that the person who si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pean the exact nature of the property or right, or avers that the time for payment, delivery, performance or enjoyment has not yet come or is accompanied by a refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to set-off, or is addressed to a person other than a person entitled to the property or right; (b) the word signed means signed either personally or by an agent duly authorised in this behalf; and | (c) an application for the execution of a decree or order shall not be deemed to be an application in respect of any property or right. 8. From the perusal of provisions of Section 18(1) of Limitation Act, 1963, it transpires that a fresh period of limitation in respect of live claim i.e. enforceable liability to pay subsisting as on the date of acknowledgement is obtained to initiate legal proceedings. Against a debtor. In various judicial decisions, it has been held that provisions of Section 18 of Limitation Act, 1963 have to be construed liberally so that party having legal rights do not suffer by an unreasonable approach of the party liable to pay. It is also to be noted that explanation (a) defines that what could consti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the company and the promoters and it is requested to accept the same and approve accordingly. It has also been mentioned that they have committed themselves to comply with the terms of the proposal, hence, picking one substance from the proposal cannot override the whole context and intent of the Corporate Debtor. Accordingly, this contention is also rejected. Before leaving, we may also point out that in view of this OTS proposal we have not gone into the aspect of such liability appearing in the balance sheet of the Corporate Debtor for sated years which would certainly extend the limitation period for the purpose of filing application under Section 7 of IBC, 2016. This aspect has also been now put to rest by the Hon'ble Supreme Court in the case of Asset Reconstruction Company vs. Bishal Jaiswal has held that presentation of liability in the balance sheet, which is duly signed by the Directors of the company, would amount to acknowledgement of liability within the meaning of provisions of Section 18 of Limitation Act, 1963. 9. As far as issue of authorisation of person who filed this application is concerned, we have gone through the documents produced before us. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... akhudi Citcile, Navrangpura, Ahmedabad-380014, under section 13(1) (c) of the IB Code as IRP. 3. That the Moratorium under Section 14 of the Code shall come to effect from 17.02.2021 till the completion of Corporate Insolvency Resolution Process or until this: Bench approves. the Resolution Plan under Sub- Section (1) of Section 31 or passes an order for liquidation of Corporate Debtor under Section 33, as the case may be. 4. That the Adjudicating Authority hereby prohibits the institution of suits or continuation of pending suit or proceedings against the Corporate Debtor including execution of any judgment, decree or order in any Court of law and further prohibits a Tribunals, Arbitration Panels or other Authority(s), transferring, encumbering, alienating or disposing (of by the Corporate Debtor) any of Corporate Debtor assets or any legal right or beneficial interest therein; any action to foreclose, recover or enforce any security interest created by the Corporate Debtor in respect of its property including any action under the SARFAESI Act, 2002 the recovery of any property: by an--owner: or lessor where~ such property is occupied by or in the possession of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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