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TMI Blog2023 (11) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 which is amply evident from the fact that they had themselves chosen to send the OTS proposal to Respondent No.1 on 21.10.2016 instead of sending the same to the original Financial Creditor. The OTS proposal is placed at page 287 of the Appeal Paper Book (APB). It is, therefore, clear that the Appellant/Corporate Debtor was not only aware of the assignment of the debt but had accepted and acknowledged this fact by sending the OTS proposal to the assignee. Moreover, the issue of assignment deed was never raised by the Appellant during the hearing of the main petition or at any stage prior to reserving the matter for orders. It is a well settled proposition of law that the two stages of reserving of judgment and pronouncement of judgment are in a continuum with no hiatus or gap as such in the two stages. That being the well accepted and time-tested practice in court proceedings, subsequent pleadings filed by way of an I.A. after the judgement is reserved is normally not entertained for reasons of procedural propriety - There is no material on record to show that this debt had been liquidated by the Corporate Debtor. That being so, the debt was continuing and there was a default ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ders. 2. The brief facts of the case are as follows: - The Corporate Debtor-Maa Durga Commotrade Pvt. Ltd. had obtained credit facility from the Karnataka Bank Limited ( KBL in short) in 2010 for an amount of Rs.1 crore. The loan account of the Corporate Debtor was classified as NPA by the KBL on 05.07.2013 since the Corporate Debtor failed to repay the loan. A demand notice under the SARFAESI Act was sent by KBL to the Corporate Debtor on 29.08.2013 to which the Corporate Debtor had sent a reply on 06.09.2013. The KBL subsequently assigned the debt to JM Financial Asset Reconstruction Company Ltd.-present Respondent No.1 on 15.12.2014 by way of an Assignment Deed. The Corporate Debtor submitted an OTS proposal to the Respondent No.1-Financial Creditor on 21.10.2016 for an amount of Rs.7.50 crore which was approved by the Financial Creditor. The Corporate Debtor failed to pay back in terms of the OTS leading to revocation of the same. The Respondent No.1-Financial Creditor filed a Section 7 petition under the IBC for initiation of CIRP of the Corporate Debtor. The matter was heard by the Adjudicating Authority and reserved for orders on 07.08.2023. The orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Debtor after a lapse of more than three years and therefore clearly time barred. 4. The Learned Counsel for the Respondent No.1 rebutting the arguments of the Appellant submitted that in Section 7 application, the key issue that is required to be seen by the Adjudicating Authority is whether there is a debt owed by the Corporate Debtor which is due and payable and if so whether any default has been committed in repayment of the debt. It was added that in this case both debt and default stood established and Adjudicating Authority has rightly held that this is a fit case for admission of Section 7 application. 5. Elaborating further, the Learned Counsel for the Respondent No. 1 asserted that the ground raised by the Appellant that Section 7 application was barred by limitation was utterly misconceived. The debt had been acknowledged by the Appellant on 06.09.2013 in their reply to the SARFAESI notice and subsequently an OTS proposal had been sent by them to the Respondent No.1 on 21.10.2016. That apart, the balance sheets of the Corporate Debtor for the years 2014-15 and subsequently in 2017-18 and 2018-19 clearly depicts acknowledgment of financial debt. 6. It was furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... logical reasoning as to why this issue was not raised in the main company petition but is being raised belatedly in the I.A. The Respondent No. 1 also vehemently contended that the assignment agreement, basis which, Section 7 application was filed was validly stamped and duly registered. Moreover, the Appellant having already accepted and acknowledged the existence of the assignment agreement while sending their OTS proposal, it again does not stand to reason how the plea of technical deficiency in terms of insufficiency of stamping of the said agreement could now be belatedly raised in the I.A. 253/2023. It has been submitted that the Appellant has raised a meritless contention that the Section 7 application should have been dismissed by the Adjudicating Authority on the ground of non-attachment of the Trust Deed. 11. Having seen the material on record, we are convinced that the Appellant was fully aware of the assignment of debt by the original Financial Creditor to the Respondent No.1 which is amply evident from the fact that they had themselves chosen to send the OTS proposal to Respondent No.1 on 21.10.2016 instead of sending the same to the original Financial Creditor. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained facts which were already in existence at the time of filing of reply and at the time of making pleadings in the main company petition. Neither do we find any cogent grounds having been cited to explain what had impeded the Appellant from flagging these issues during the hearing of the main company petition. It also does not stand to any logical reasoning as to why the issues raised in the I.A. could not have been raised in the main company petition. Raising such technical issues and that too after detailed hearing in the main petition was concluded clearly shows that the Appellant was merely trying to raise feeble grounds in the I.A. to somehow delay and derail the admission of CIRP. Hence in our considered opinion, the Adjudicating Authority had rightly rejected the I.A. 253/2023. 14. This now brings us to the contention of the Appellant that the debt was barred by limitation. It is their case that the date of default was 06.09.2013 and the OTS proposal of 21.10.2016 was made after more than three years and hence could not have been taken as acknowledgment for the purposes of limitation. During the period of three years from the date of default, no payments had been made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is an undisputed fact that the Corporate Debtor had availed the loan facility undisputedly from KBL, the original Financial Creditor. This debt had also been clearly acknowledged by the Appellant on 06.09.2013 in their reply to the SARFAESI notice. The balance sheets of the Appellant/Corporate Debtor for the years 2014-15 and subsequently in 2017-18 and 2018-19 as placed at pages 303-328 of the APB also clearly depicts an acknowledgment of financial debt. It is, however, the case of the Appellant that the financial debt in the balance sheet is reflected qua KBL, the original Financial Creditor and not to the Respondent No.1. Be that as it may, it is an undisputed fact that the OTS proposal had been sent by the Appellant not to KBL but to the Respondent No.1 on 21.10.2016. This constitutes sufficient evidence that they were very much aware that assignment of the debt in favour of Respondent No.1 was already in place. From this OTS proposal, it can be safely inferred that the Corporate Debtor had acknowledged their liability to pay to the Respondent No. 1. The acknowledgment of debt in the present facts of the case is therefore clear and unambiguous. 17. The balance sheets also r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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