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TMI Blog2023 (5) TMI 612X X X X Extracts X X X X X X X X Extracts X X X X ..... ice dated 21.02.2012, calling upon the Respondent to pay the entire outstanding amount due. However, no payment was made by the Respondent and hence the date of default cannot be taken to be a date of NPA of the Borrower but the date of default has to be taken when the guarantee invocation notice dated 21.02.2012 was given. While the foreign suit was pending the Respondent filed a reference with the BIFR on 06.11.2012 which was registered on 07.12.2012 and the Respondent was restrained from disposing of or alienating in any manner any fixed assets without the consent of the BIFR. Neither the foreign suit was contested by the Respondent mentioning the pendency of the reference nor mentioned about the foreign suit in the reference. The foreign suit was decreed on 08.04.2014. The Facility Agent also filed an application for intervention before the BIFR for their impleadment but the said application was not decided. It has also been held in the case of Hyderabad Abrasives Minerals [ 2002 (12) TMI 497 - HIGH COURT OF ANDHRA PRADESH ] that the benefit of exclusion of period for computing the limitation period, spent while the Company was before BIFR shall be applicable even to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to M/s Svizera Holdings B.V., a company incorporated under the laws of the Netherlands (hereinafter referred to as Borrower ), a wholly owned foreign subsidiary of the Respondent (Maneesh Pharmaceuticals Limited) vide facility agreement dated 24.09.2007 (in short Facility Agreement ) which was executed between the Borrower, the Respondent as the Guarantor and Barclays Bank PLC, Hong Kong Branch, acting as an Agent and the Offshore Security Trustee of the Financial Creditors (Facility Agent). 3. Subsequently, the part of commitment of Barclays Bank PLC (as the Lender) was transferred to Union Bank of India, Hong Kong vide transfer certificate dated 03.11.2008. Therefore, Union Bank of India also joined with other lenders in filing the Company Petition in its capacity as the Financial Creditor. 4. The term loan extended vide facility agreement was secured by way of (a) 2 (two) Deeds of Hypothecation both dated 3rd June 2008 by which the Respondent hypothecated its present and future movable assets in favour of IL FS Trust Company Limited, the Onshore Security Trustee of the Appellants ( Onshore Security Trustee ).(b) Share Pledge Agreement dated 3rd June 2018 by which t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion Commercial Court, London (Queen s Bench, UK) on 22.02.2012 in terms of clause 37.1 of the facility agreement. The said suit was contested by the Respondent on merits by filing a statement of defence on 29.05.2012. 10. While Foreign Suit was pending the Respondent filed a reference with BIFR u/s 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) on 06.11.2012 which was registered as BIFR Case No. 74 of 2012 (Reference). The BIFR vide its order dated 07.12.2012 registered the reference and restrained the Respondent from disposing of or alienating in any manner any fixed assets of the Respondent without consent of the BIFR. 11. On the other hand, the Respondent contested the foreign suit without mentioning the pendency of the Reference before the BIFR nor mentioned about the foreign suit in the reference. The Respondent also did not raise any objection in regard to continuation of the foreign suit on account of the pendency of the reference. The foreign suit was decreed on 08.04.2014. 12. The Facility Agent along with the Security Trustee filed an intervention application being Miscellaneous Application No. 253/BC/2013 before the BIFR with a req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period of limitation. It is also the case of the Respondent that books of accounts of the Respondent does not reflect any debt due and payable and that the Appellants have admitted that pursuant to the judgment dated 08.04.2014 passed in the foreign suit, UDS 727648.32 has been realized from sale of offshore securities and that the Appellants have not preferred any proceedings between the year 2014 to 2017 whereas the application under Section 7 of the Code has been filed only in 2019 which was hopelessly time barred. 16. In rebuttal, case of the Appellant is that while the foreign suit was pending, the Respondent filed a reference on Form A which was registered on 07.12.2012 and a restrained order was passed. The Facility Agent along with Security Trustee filed an Intervention Application in the pending reference and in view of the Section 22(5) of the SICA, the period during the pendency of the reference till 01.12.2016 when the Act was repealed had to be excluded. 17. The Adjudicating Authority, on the aforesaid facts and circumstances observed that the issue involved is as to whether the Appellant can take advantage of Section 22(5) of the SICA while it had continued wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. 20. It is further argued that the foreign suit was decided on 08.04.2014 directing the Respondent and Borrower to pay Approx. USD 35 Million and the foreign judgment was not challenged by the Respondent and has thus attained finality. It is further argued that BIFR vide its order dated 21.11.2014, admitted the reference declaring the Respondent a sick industrial company in terms of Section 3(1)(o) of the SICA. The Appellants filed an application for intervention before the BIFR to intervene in the reference and in the reply to the application the Respondent clearly admitted its liability qua the Appellants. It is also submitted that though the pleadings in the intervention application were complete but it was not finally decided by the BIFR till the repeal of the SICA. It is argued that for the purpose of filing the foreign suit prior consent of the BIFR was not required because the SICA does not have extra territorial jurisdiction. In this regard, reliance has been placed upon a decision of the Hon ble Bombay High Court rendered in the case of Ashapura Minechem Ltd. Vs. Armada (Singapore) Pte. Ltd., 2016 SCC Online Bom 5326. 21. It is further argued that the Learned Adjud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hopelessly time barred as it has been filed on 30.08.2019 after over a period of eight years from the date of NPA. It is further submitted that the lenders did not file any suit by 30.07.2014 before any court of law in India rather they filed a foreign suit against the Borrower and the Guarantor (Respondent) and obtained a judgment and decree dated 08.04.2014 during the period when the reference was pending before the BIFR under the SICA. It is further submitted that there is no acknowledgment as per Section 18 of the Act for the purpose of extension of period of limitation because in the present case the limitation had expired on 26.06.2014 and 30.07.2014. In this regard, reference has been made to a decision of the Hon ble Supreme Court in the case of Sesh Nath Singh Vs. Baidyabati Sheoraphuli Coop. Band Ltd. , (2021) 7 SCC 313. It is further argued that as per principle of co-extensiveness, non-payment of dues can be raised against the Guarantor for the time barred debt if it cannot raise against the principal debtor. According to the Respondent the debt against the Borrower became time barred in June/July, 2014, therefore, a application under Section 7 of the Code could not hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 22 of the SICA for taking steps in execution of the said two foreign awards in respect of the properties of the petitioner situated outside India. 29. A conjoint reading of Section 1(2) and Section 21 of the SICA clearly indicates that the provisions of the SICA are extended only to the whole of India and not outside India. The expression any of the properties of the Industrial Company in Section 22 of the SICA will ppn 17 12.conp-89.15(j).doc have to be read with Section 1(2) of the SICA which provides for territorial jurisdiction of the BIFR which is extended only to any part of this country and not outside India. A reference to the judgment of this Court in the case of Murablack India Limited (supra) will be useful to deal with this issue raised by the learned senior counsel for the respondents. It is held by this Court in the said judgment that prima facie, provisions of Section 22 which have only territorial application would not be attracted to restrain a party from proceeding with the suit instituted outside India even before an application was moved by other party before the BIFR. It is held that the Courts would not injunct proceedings in a foreign Court unl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indicate that in computing the period of limitation for enforcement of any right, privilege or liability, the period during which the remedy remains suspended is available only to those who approach BIFR under Section 22(1) is absent. The Court cannot introduce such element in Sub-section (5) of Section 22 of SICA. The right, privilege, obligation or liability can be enforced by any person against the industrial company subject to Sub-section (1) of Section 22 of SICA after the scheme is implemented. The bar for such enforcement is only during the four stages before BIFR and not otherwise. 30. However, in the present case, the Appellant made an effort to become a party by filing a Miscellaneous Application before the BIFR but the said application was not decided though the Respondent filed the reply also to the said application. 31. In the present case, if we refer to the dates then date of invocation of guarantee is 21.02.2012. Form A Case No. 74 of 2012 (reference) is 06.11.2012, the reference was registered on 07.12.2012 and the SICA was repealed w.e.f. 01.12.2016 vide notification dated 25.11.2016, therefore, the limitation would start running from 01.12.2016 and shal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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