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TMI Blog2023 (4) TMI 1138X X X X Extracts X X X X X X X X Extracts X X X X ..... rigger date is thus 30.06.2011 for the purpose of counting the period of three years which is up to 30.06.2014. Meaning thereby, w.e.f 01.07.2014 the limitation to apply under Section 7 of the Code had expired. However, Section 18 of the Act deals with acknowledgement of the debt for the purpose of extension of limitation but it categorically provides that the acknowledgement has to be made during the period of three years and not beyond that. In the present case, the Bank could not produce any evidence to prove that there has been acknowledgment in writing and signed by the Appellant for the purpose of extension of period of limitation except for the reply to the notice issued under Section 13(2) of the SARFAESI Act, 2002 in which the Appellant did not make any unambiguous and unequivocal acknowledgement which could extend the period of limitation. The limitation counted from the date of default i.e. 30.06.2011 had expired on 30.06.2014 and there is no acknowledgement of debt during this period in terms of Section 18 of the Act. The Bank did not place on record the balance sheet prior to 2014 and the only balance sheets placed on record are from 31.03.2015 to 31.03.2018 and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Ramdas Dutta, Shri Debdas Datta and Shri Biprodas Dutta. It also issued letter dated 17.08.2013 to the Corporate Debtor regarding redemption of mortgage for the default committed by the Corporate Debtor and took recourse under the SARFAESI Act, 2002 by issuance of notice dated 10.10.2013 under Section 13(2) of the said Act. Subsequently, the Bank issued notice dated 01.01.2014 under Section 13(4) of the SARFAESI Act, 2002 to the Corporate Debtor. 3. It is averred that the Bank, with the concurrence of the Corporate Debtor offered One Time Settlement (OTS) vide letter dated 01.11.2018 under SARAL KARJ BHUGTAN YOJNA which was accepted by the Corporate Debtor on 28.12.2018 and the said OTS was extended from time to time but the Corporate Debtor failed to pay and hence OTS proposal was cancelled on 01.08.2019 and on 01.11.2019 the petition under Section 7 of the Code was filed before the Adjudicating Authority. 4 It is an admitted fact that the Bank did not mention the date of default in Part IV of Form 1 which is a mandatory requirement in view of the fact that Section 7 of the Code can be invoked only if there is a debt and default. Consequently, the Adjudicating Authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Applicant Bank for OTS under SKBY 01.11.2018 10. OTS Offer under SKBY accepted and signed by the CD 28.12.2018 11. Letter of Approval of OTS under SKBY accepted and duly signed again by the Corporate Debtor 21.01.2019 12. Letter from the CD regarding acknowledgement of debt due to the Applicant Bank and acceptance of offer to replay in terms of the SKBY Yojna 19.04.2019 6. However, it is made clear that the dates given in Para 18 of the impugned order appears to have been inadvertently mentioned as the dates and events mentioned in para 18 of the impugned order pertains to another case bearing CP (IB) No. 1749/KB/2019 which was also decided on the same date i.e. 26.08.2022 in which CA (AT) (Ins) No. 1285 of 2022 has been filed before this Tribunal. 7. Be that as it may, the Corporate Debtor contested the application filed under Section 7 of the Code on the ground that it has been filed beyond the period of limitation and is not maintainable. The Adjudicating Authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Further, the settlement proposal under the SARAL KARJ BHUGTAN YOJNA provided for the payment of the balance amount within 31 March, 2019. 8. Counsel for the Appellant has vehemently argued that an application under Section 7 of the Code can be filed for initiation of Corporate Insolvency Resolution Process (in short CIRP ) only on the occurrence of the default. In this regard, Section 7(1) of the Code has been referred to which is reproduced as under:- 7. Initiation of corporate insolvency resolution process by financial creditor. (1) A financial creditor either by itself or jointly with 2[other financial creditors, or any other person on behalf of the financial creditor, as may be notified by the Central Government] may file an application for initiating corporate insolvency resolution process against a corporate debtor before the Adjudicating Authority when a default has occurred. 9. She has further submitted that it is now well settled that the limitation to file an application under Section 7 of the Code is to be taken from Article 137 of the Limitation Act, 1963 (in short Act ) which is also reproduced as under:- Description of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgment 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, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed. (2) Where the writing containing the acknowledgment is undated, oral evidence may be given of the time when it was signed; but subject to the provisions of the Indian Evidence Act, 1872 (1 of 1872), oral evidence of its contents shall not be received. Explanation. For the purposes of this section, (a) an acknowledgment may be sufficient though it omits to specify 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 perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The trigger date is thus 30.06.2011 for the purpose of counting the period of three years which is up to 30.06.2014. Meaning thereby, w.e.f 01.07.2014 the limitation to apply under Section 7 of the Code had expired. However, Section 18 of the Act deals with acknowledgement of the debt for the purpose of extension of limitation but it categorically provides that the acknowledgement has to be made during the period of three years and not beyond that. In the present case, the Bank could not produce any evidence to prove that there has been acknowledgment in writing and signed by the Appellant for the purpose of extension of period of limitation except for the reply to the notice issued under Section 13(2) of the SARFAESI Act, 2002 in which the Appellant did not make any unambiguous and unequivocal acknowledgement which could extend the period of limitation. The Bank has also relied upon OTS offer dated 28.12.2018 which is purported to have been approved and accepted by the Corporate Debtor on 21.01.2019 but that too was not during the period of limitation and cannot be counted for the purpose of extension of period of limitation in terms of Section 18 of the Act. 17. Thus, the limi ..... 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