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TMI Blog2023 (11) TMI 566X X X X Extracts X X X X X X X X Extracts X X X X ..... urisdiction or other cause of a like nature, is unable to entertain it. A winding up petition was filed and thereafter a civil application. Based on that benefit of Section 14 was sought, which was denied as noted above. Present is a case where winding up petition was filed by the third party - Adjudicating Authority has rightly distinguished the judgement of the Hon ble Supreme Court and rightly took the view that the Appellant is not entitled to take the benefit of judgment of the Hon ble Supreme Court in Sesh Nath Singh [ 2021 (3) TMI 1183 - SUPREME COURT] . In the Application, which was filed under Section 7, the Appellant has not brought on record the OTS offer given by the Corporate Debtor and for the first time in the Appeal, the said document has been brought on record. The Corporate Debtor has no opportunity to file a reply to the OTS offer or to make its submission on the said letter - the ends of justice be served in granting opportunity to the Corporate Debtor to file a reply with regard to OTS offer dated 08.07.2021, which is brought on the record in this Appeal. Section 7 Application revived before the Adjudicating Authority and direct the Adjudicating Author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2022 claiming an amount of Rs.22,52,02,115.61/-. The date of default mentioned in the Part-IV of the Application was 30.04.2016. In Section 7 Application, the Appellant has also annexed the order dated 25.01.2018 of the Bombay High Court in Company Petition No.678 of 2015. An additional affidavit was also filed by the Appellant in support of Section 7 Application. (v) The Adjudicating Authority issued Notice. In response to the Notice, the Corporate Debtor did not appear nor filed any reply. The Adjudicating Authority heard the learned Counsel for the Appellant and observed that default had occurred on 30.04.2016 and Section 7 petition was filed on 13.01.2022, which petition filed after three years, is barred by time. The Appellant before the Adjudicating Authority relied on the judgment of the Hon ble Supreme Court in Sesh Nath Singh vs. Baidyabati Sheorapuli Co-op Bank Limited, which was distinguished by the Adjudicating Authority. It was observed that the third party M/s Oswal Minerals Limited has filed winding up petition on the basis of which Appellant cannot claim benefit of exclusion of period during which Company Petition filed by the third party remained pending. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Debtor. The Liquidator asked the Appellant to take steps otherwise the Office of Official Liquidator shall proceed to take the physical possession of the assets. The Liquidator has sent an email dated 24.02.2023 to the Appellant. Benefit of Section 14, sub-section (2) of the Limitation Act is not applicable since the said benefit can be extended when same party for the same relief has been prosecuting in another civil proceeding. The Appellant was not the party in Company Petition 678/2015 filed in the Bombay High Court. Hence, the Appellant cannot take benefit of any limitation for the proceedings in which he was not even the party. The judgment of the Hon ble Supreme Court in Sesh Nath Singh vs. Baidyabati Sheorapuli Co-op Bank Limited is not attracted in the present case. The Appellant was not vigilant throughout the period. 6. We have considered submissions of learned Counsel for the parties and have perused the record. 7. Section 14, sub-section (2) of the Limitation Act, 1963 on which reliance has been placed, provides as follows: 14(2) In computing the period of limitation for any application, the time during which the applicant has been prosecuting with due di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a meeting. Copy of one of the letters sent by Official Liquidator dated 24.02.2023 has been filed along with the additional affidavit. The Liquidator, has issued notice to the Appellant and called them to participate in the winding up petition and the Appellant was also asked to inform about the outcome of the proceedings initiated under SARFAESI Act. The Liquidator has also referred to Section 446, subsection (1) of the Companies Act, 1956 and the Appellant was requested to obtain leave of the Court to proceed with the suit. Following parts of the letter of the Liquidator is relevant to notice: In view of your email dated 22/02/2023, your kindly attention is invited to the provisions of Section 446(1) of the Companies Act, 1956 which is re-produced as below:- Section 446 (1): When a winding up order has been made or the Official Liquidator has been appointed as Provisional Liquidator no other legal proceedings shall be commenced or if pending at the date of winding up order shall be proceeded with against the company except by leave of the court and subject to such terms as the court may impose. You are therefore requested to obtain necessary leave as required und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... never sought leave of the Company Judge to proceed with SARFAESI proceedings. The Appellant is not entitled for the benefit of Section 14 of the Limitation Act due to pendency and winding up petition in the High Court. 11. The learned Counsel for the Respondent has relied on the judgment of this Tribunal in Company Appeal (AT) (Ins.) No.1066 of 2021 Vedika Credit Capital Limited vs. Shriram Power and Steel Pvt. Ltd., where this Tribunal has noticed the requirement to be fulfilled for extending the benefit of Section 14 of the Limitation Act, 1963. This Tribunal in the said judgment has noted and dealt with the judgment of the Hon ble Supreme Court in Sesh Nath Singh vs. Baidyabati Sheorapuli Co-op Bank Limited and has noted the reason due to which benefit of Section 14 was extended in Sesh Nath Singh case. It is useful to note paragraphs 10, 11 and 12 of the said judgment, which is as follows: 10. Learned Counsel for the Appellant has relied on the Judgment of Hon ble Supreme Court in the matter of Sesh Nath Singh Vs. Baidyabati Sheoraphuli Cooperative Bank Ltd. [2021 7 SCC 321] to support his contention that Appellant is entitled for benefit of Section 14 of the limita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he financial creditor initiated the application under Section IBC. 12. Thus in the above case, the benefit of Section 14 was extended because prima facie it was proved that proceedings under SARFAESI Act were without jurisdiction. Present is not a case where it is even contended that winding up petition filed by the Appellant before the Kolkata High Court were without jurisdiction proceeding or were terminated by the defect of a like nature. 12. In the above case, a winding up petition was filed and thereafter a civil application. Based on that benefit of Section 14 was sought, which was denied as noted above. Present is a case where winding up petition was filed by the third party. We, thus, are of the view that Adjudicating Authority has rightly distinguished the judgement of the Hon ble Supreme Court and rightly took the view that the Appellant is not entitled to take the benefit of judgment of the Hon ble Supreme Court in Sesh Nath Singh (supra). 13. The learned Counsel for the Appellant has lastly contended that one time request for settlement was received on 08.07.2021, hence, the Appellant is entitled for the benefit of Section 25, sub-section (3) of the Cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but the debt is barred by the Limitation Act. A signs a written promise to pay B Rs 500 on account of the debt. This is a contract. (f) A agrees to sell a horse worth Rs 1000 for Rs 10. A's consent to the agreement was freely given. The agreement is a contract notwithstanding the inadequacy of the consideration. (g) A agrees to sell a horse worth Rs 1000 for Rs 10. A denies that his consent to the agreement was freely given. The inadequacy of the consideration is a fact which the Court should take into account in considering whether or not A's consent was freely given. 29. From the above, it is clear that any agreement to pay a time-barred debt, would be enforceable in law, within three years from the due date of payment, in terms of such agreement. It appears that Section 25(3) of the Contract Act was not brought to the notice of NCLAT. NCLAT also did not consider the aforesaid section. 30. In this appeal, it is contended that the last offer of 20-12-2018 was followed by an agreement. Whether there was such agreement or not would have to be considered by the adjudicating authority. To invoke Section 25(3), the following conditions must be sat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jar Director (M/s Dharmraj Aluminium Industries) 15. The said offer was rejected on 15.07.2021 by the Bank asking the Corporate Debtor to improve the offer. In the Application, which was filed under Section 7, the Appellant has not brought on record the OTS offer given by the Corporate Debtor and for the first time in the Appeal, the said document has been brought on record. The Corporate Debtor has no opportunity to file a reply to the OTS offer or to make its submission on the said letter. We, thus, are of the view that ends of justice be served in granting opportunity to the Corporate Debtor to file a reply with regard to OTS offer dated 08.07.2021, which is brought on the record in this Appeal. We make it clear that other issues regarding benefit of Section 14 of the Limitation Act on the basis of winding up petition or SARFAESI Act proceedings shall not be allowed to reopen, which have already been not accepted by the Adjudicating Authority, rightly so. Only issue, which needs to be considered by the Adjudicating Authority is as to the effect and consequence of One Time Settlement, if any by the Corporate Debtor on the question of limitation. 16. We, thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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