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TMI Blog2022 (11) TMI 1044X X X X Extracts X X X X X X X X Extracts X X X X ..... laid down that it is not the date of NPA which strictly triggers the cause of action but the date of default - In the instant case, it is to be construed that the date of default is 31.03.2016 as till then, several attempts were made to restructure the loan and fresh sanctions were also made in favour of the Corporate Debtor . At the cost of repetition, the last payment was made on 13.10.2017 and this part payment is covered under Section 18 of the Limitation Act, 1962. Thus, the Application was well within the period of Limitation. It is also relevant to note that the copy of the Financial Statements dated 2013, 2014 showing the record of default were also appended to the Application. The documents on record clearly evidence that there was a date of default and we find no illegality or infirmity in the Order of the Adjudicating Authority in admitting the Section 7 Application - however the Company is already under Liquidation as of today. Appeal dismissed. - COMPANY APPEAL (AT) (INSOLVENCY) NO. 832 of 2021 & I.A. 1381 of 2022 - - - Dated:- 23-11-2022 - [ Justice Anant Bijay Singh ] Member ( Judicial ) And [ Ms. Shreesha Merla ] Member ( Technical ) For the Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /acknowledgment of debt. Therefore, the only legally sustainable plea of limitation raised by the Corporate Debtor in the sur-rejoinder and written submission is liable to be rejected and accordingly rejected. 5. Upon hearing the submissions of the counsel appearing for the Financial Creditor and upon perusing the material available on record, this bench is of the considered opinion that the Financial Creditor has successfully proved the existence of debt and default and the debt is also within limitation. The Financial Creditor has also suggested the name of proposed Interim Resolution Professional in part-3 of the Petition along with his consent letter in Form-2. Thus, the present Company Petition satisfies all the necessary legal requirements for admission. 2. It is the main case of the Learned Counsel for the Appellant that the Impugned Order was obtained by playing fraud as the date of NPA was wrongly mentioned by the Financial Creditor as 31.03.2016, whereas it was 31.03.2011; the Financial Creditor has concealed this fact and made an incorrect statement of oath that the NPA was 31.03.2016; the terms of restructuring of the account mentioned in the letter dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed their Additional Written Submissions, reiterating the facts and contending that the Demand Notice dated 31.03.2016 issued under SARFAESI cannot be a basis for fresh cause of action under IBC. 5. Learned Counsel appearing for the first Respondent/Resolution Professional submits that the Company is already gone into Liquidation and therefore the matter stands infructuous. 6. Learned Counsel appearing for the second Respondent/ Financial Creditor submitted that the Appellant was enjoying Credit Facilities to the extent of Rs.24Crs./- vide sanctioned letter dated 14.10.2010; that the account earned NPA on 31.03.2011, but was subsequently restructured vide another sanctioned letter dated 23.05.2013, whereby the Credit Facilities of another 6Crs. was sanctioned; that the Appellant failed to comply with the terms of the restructuring dated 23.05.2013 and therefore a Demand Notice was issued on 29.04.2016 under Section 13(2) of the SARFAESI Act, 2002, demanding the outstanding amount; there was no objection raised by the Appellant at that point of time; an Original Application bearing No. 1009/2018 was filed before the Hon ble DRT III for a Claim amount of Rs.37,18,82,327.80/ an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings under the IBC. This Court sees no reason why an offer of One Time Settlement of a live claim, made within the period of limitation, should not also be construed as an acknowledgment to attract Section 18 of the Limitation Act. In Gaurav Hargovindbhai Dave (supra) cited by Mr. Shivshankar, this Court had no occasion to consider any proposal for one time settlement. Be that as it may, the Balance Sheets and Financial Statements of the Corporate Debtor for 2016-2017, as observed above, constitute acknowledgement of liability which extended the limitation by three years, apart from the fact that a Certificate of Recovery was issued in favour of the Appellant Bank in May 2017. The NCLT rightly admitted the application by its order dated 21st March, 2019. 142. To sum up, in our considered opinion an application under Section 7 of the IBC would not be barred by limitation, on the ground that it had been filed beyond a period of three years from the date of declaration of the loan account of the Corporate Debtor as NPA, if there were an acknowledgement of the debt by the Corporate Debtor before expiry of the period of limitation of three years, in which case the period of Limit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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