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TMI Blog2023 (9) TMI 821X X X X Extracts X X X X X X X X Extracts X X X X ..... n period would be three years from the last date of the financial year previous to the declaration of NPA, which would be 31.03.2013, and would run up to 31.03.2016. If there were no further intervening circumstances or developments relating to acknowledgment, the contention raised by the appellant that the petition under Section 7 of IBC having been filed much beyond 31.03.2016, in 2020 to be specific on 22.01.2020, the petition would be clearly barred by limitation. Whether the debt acknowledged in the balance sheet of the financial year would end on 31st March, 2015 and whether the three OTS proposals would give a fresh life of limitation of three years from each of the respective dates? - HELD THAT:- The documents relating to acknowledgement claiming benefit of Section 18 were introduced at appellate stage, and such documents being balance sheets and settlement offers. It was held that the same could be accepted even at the appellate stage and a settlement offer akin to an OTS proposal would be an acknowledgment of debt for the purpose of Section 18 of Limitation Act. The only caveat was that such acknowledgments should be before the expiry of limitation prescribed under l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 87,56,24,381/- was furnished by the appellant between the period 23.06.2007 to 03.11.2008. Universal Premises executed a simple mortgage without possession in favour of the appellant for seven floors on 06.11.2008. 2.2. On 02.05.2011, Universal Premises executed a sale deed in favour of Rajput Retail Ltd. RRL . The sale deed was for the land admeasuring 5123.90 sq. meters which included the land beneath the aforesaid building - Solaris C also. The Leave and License Agreements in favour of the appellant were duly acknowledged, reserved, and protected under the sale deed. 2.3. RRL, having availed credit facilities from the State Bank of India In short, State Bank of India (Respondent No.2), created an equitable mortgage on 29.06.2011 with respect to the land underneath the building-Solaris C to secure the said credit facilities. 2.4. In 2012, Universal Premises was merged with RRL under the orders of the High Court of Bombay and it was renamed as Shreem Corporation Limited In short, SCL , which is the Corporate Debtor. Between June, 2012 and 17.10.2013, the appellant issued notices for the refund of Security Deposit under the Leave and License agreement. Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20.10.2021, the counsel for the Respondent No.2 filed a copy of the order dated 22.09.2021 admitting its petition under Section 7 IBC passed by the Adjudicating Authority. 2.15. The appellant, aggrieved by the order of admission dated 22.09.2021, preferred an appeal before the NCLAT under Section 61 of IBC which was registered as Company Appeal (AT) (Ins.) No.930 of 2021. By the impugned order dated 04.01.2022, NCLAT dismissed the said Company Appeal, giving rise to the present Civil Appeal. 3. This Court, while entertaining the appeal, issued notices on 01.04.2022 and passed an order of status quo. Pleadings have been exchanged and we have heard the learned counsel for the parties and perused the material on record. 4. Before proceeding further with the respective submissions, certain dates which were not mentioned by the appellant, however, the same having been disclosed by the respondent No.2, needs to be referred to. 4.1. The change in the number of days for which delay had been caused from 1392 to 662 days by Civil Appeal No.2085 of 2022 Page 7 of 32 the Respondent No.2 was based upon the Balance Sheet for the Financial year ending 31.03.2015, wherein the debt of Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and as such the limitation would run up to three years from the said date of the balance sheet, which would extend up to 31.03.2018, and it was on this premise that Respondent No. 2 made an application stating that the actual delay was not 1392 days but 662 days. d) Respondent No. 2, apart from declaring the Corporate Debtor as NPA on 28.06.2013, had further participated before the High Court of Bombay by moving applications objecting to the said proceedings, where it had failed. Section 7 petition was filed thereafter on 22.01.2020. e) Before the NCLAT, the Respondent No. 2 further improved its case by referring to an OTS proposal dated 16.02.2019 as an acknowledgement of the debt. However, this was objected to on the ground that even if it is assumed that the Corporate Debtor acknowledged the debt as per the Balance Sheet of the financial year ending 31.03.2015, the period of limitation from the said date having expired on 31.03.2018, the OTS proposal dated 16.05.2019 would be beyond the period of limitation and, as such, would be of no assistance to the Respondent No. 2. f) The Respondent No. 2, before this Court, filed documents which were not presented either before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Anr. In CA(AT) (Insolvency) No. 827 of 2020 passed by NCLT, (Principal Bench, Delhi) , viii. Insolvency Law Report March 2018, ix. Rajendra Narottamdas Sheth and Another vs. Chandra Prakash Jain and Another (2022) 5 SCC 600 , x. Gopal Sardar vs. Karuna Sardar (2004) 4 SCC 252 , and xi. Serish Maji vs. Nishit Kumar Dolui 1999 SCC Online Cal 58 . 7. On the other hand, Shri N. Venkataraman, learned Additional Solicitor General appearing for Respondent No. 2, in addition to the list of dates mentioned by the appellant, referred to the short list of dates in support of his arguments. Some of these dates are in addition to the list of dates mentioned and already incorporated in the earlier part of this order. A brief reference to the said dates relied upon by the Respondent No. 2 are as follows: a) The Corporate Debtor was classified as NPA by Respondent No.2 on 28.06.02013. b) Notice under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 In short, SARFAESI Act was issued on 02.07.2013. c) Notice under Section 13(4) of the SARFAESI Act was issued on 23.11.2013. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be entitled to the benefit of Section 18 of the Limitation Act. o) The NCLT as also the NCLAT rightly rejected the objection taken by the appellant regarding the petition being time-barred and further rightly proceeded to admit the petition under Section 7 of the IBC by initiating the CIRP. The appeal, being devoid of merits is liable to be dismissed. p) Reliance was placed upon the following judgements by learned senior Counsel appearing for Respondent No.2, in support of his submissions: (i). Kotak Mahindra Bank Limited vs. Kew Precision Parts Private Limited and Ors (2022) 9 SCC 364, (ii). Asset Reconstruction Company (India) Limited vs. Bishal Jaiswal and Another (2021) 6 SCC 366, (iii). Dena Bank (Now Bank of Baroda) vs. C. Sivakumar Reddy and Another (2021) 10 SCC 330, and (iv). Sesh Nath Singh and Another vs. Baidyabati Sheoraphuli Co-Operative Bank Limited and Another (2021) 7 SCC 313. 8. We have considered submissions advanced by learned counsels for the parties as also the materials placed on record. 9. Before dealing with the arguments advanced, it would be appropriate to refer to the statutory provisions. Section 3(1) of the L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 (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 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. 12. The question in the present case is primarily whether Respondent No.2 would be entitled to the benefit of Section 18 of the Limitation Act and whether Section 5 of the Limitation Act thereof would also be applicable. Although Section 14 of the Limitation Act has also been referred to, but in our opinion, Section 14 will have no application inasmuch as the proceedings under the SARFAESI Act before the DRT cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be whether the debt acknowledged in the balance sheet of the financial year would end on 31st March, 2015 and whether the three OTS proposals would give a fresh life of limitation of three years from each of the respective dates. Section 18 of the Limitation Act is the provision on which strong reliance has been placed upon by the Respondent No.2 for seeking such extension of limitation. 17. A plain reading of Section 18(1) of the Limitation Act would reflect that where any acknowledgment of a liability has been made in writing by the party against whom any right is claimed, a fresh period of limitation would be computed from the time when the acknowledgment was so signed, subject to such acknowledgment being made before expiry of the prescribed period for filing a suit or application in that respect. 18. Section 18(2) of the Limitation Act may not be applicable in the present case inasmuch as all the acknowledgements in the present case have a date and, therefore, there would be no question of leading any oral evidence to establish the date of the acknowledgement. 19. Learned Senior counsel for the appellant has strongly contended that all the acknowledgments were firstl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be introduced at the stage of appeal also. The said para is reproduced hereunder: 142. There is no bar in law to the amendment of pleadings in an application under Section 7 IBC, or to the filing of additional documents, apart from those initially filed along with application under Section 7 IBC in Form 1. In the absence of any express provision which either prohibits or sets a time-limit for filing of additional documents, it cannot be said that the adjudicating authority committed any illegality or error in permitting the appellant Bank to file additional documents. Needless however, to mention that depending on the facts and circumstances of the case, when there is inordinate delay, the adjudicating authority might, at its discretion, decline the request of an applicant to file additional pleadings and/or documents, and proceed to pass a final order. In our considered view, the decision of the adjudicating authority to entertain and/or to allow the request of the appellant Bank for the filing of additional documents with supporting pleadings, and to consider such documents and pleadings did not call for interference in appeal. 23. The above discussion takes care of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application of Respondent No.2 would be entitled to benefit of Sections 5 and 18 of the Limitation Act and, therefore, was within time. (b) The second point on which case laws have been referred to was that no benefit could be claimed under Section 14 of the Limitation Act. These case laws are also not of any relevance as it has been held above that no benefit could be claimed by Respondent No.2 under the said provision. (c) The third point on which case law is relied upon is that for benefit under Section 18 of the Limitation Act, the acknowledgment should be made within expiry of the limitation provided under law. On this point it has been factually found that taking the date of acknowledgment of debt in Balance Sheet and the three OTS proposals the same were within the limitation under law or the extended limitation due to acknowledgments. Thus the case laws relied upon would have no relevance in the facts of the present case. 28. For all the reasons recorded above, we do not find any merit in the appeal. The same is accordingly dismissed. APPLICATIONS BY THE RUBY MILLS LTD: 29. IA No. 153162 of 2022 has been filed by the Ruby Mills Ltd. seeking Intervention ..... X X X X Extracts X X X X X X X X Extracts X X X X
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