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TMI Blog2024 (11) TMI 801X X X X Extracts X X X X X X X X Extracts X X X X ..... s ledger with regard to corporate debtor which is part of Section 7 application and as per the ledger as on 31.03.2020 amount outstanding was Rs.4,74,48,109/-. The ledgers indicate that there was entry of payment of interest as on 31.03.2017, 31.03.2018, 31.03.2019 and 31.03.2020. Payment of TDS was also mentioned. A perusal of the ledger indicate that the closing balance of amount in the ledger of the corporate debtor as on 31.03.2020 towards the financial creditor was Rs.4,78,69,260/-. There were entries regarding interest on loan and TDS on interest in the ledger of both the corporate debtor and the financial creditor, hence, there is no doubt that the amount is a financial debt. Further in the letter dated 20.08.2020 which has been written by the corporate debtor to the financial creditor, there is a clear admission of loan - Financial Creditor has successfully proved that there is a financial debt. Whether Section 7 application filed by the Financial Creditor dated 20.01.2023 was barred by time, loan having disbursed on 16.12.2016? - HELD THAT:- In the present case, we have already noted the letter dated 20.08.2020 which was filed by the corporate debtor in the reply to Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the company. The letter dated 20.08.2020 cannot extinguish the financial debt on a promise to allot two residential premises which is developed not by the corporate debtor but Director of the company. It is not satisfied that the financial debt shall extinguish by the promise made in the letter dated 20.08.2020. There are no error in the order of the Adjudicating Authority admitting Section 7 application. There is no merit in the Appeal. The Appeal is dismissed. - [ Justice Ashok Bhushan ] Chairperson And [ Arun Baroka ] Member ( Technical ) For the Appellant : Mr. Kunal Tondon, Mr. Kush Chaturvedi, Mr. Kunal Vaishnav, Mr. Syed Faraz Alam, Mr. Atharv Gaur and Mr. Aayushman Aggarwal , Advocates For the Respondents : Mr. Rohan Taneja, Advocate for R1 Mr. Manoj Kumar Agarwal , Advocate for IRP JUDGMENT Ashok Bhushan , J. This Appeal by a Suspended Director of the Corporate Debtor has been filed challenging the order dated 26.07.2024 passed by the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench, Court-I, admitting Section 7 application filed by the Financial Creditor through Interim Resolution Professional (IRP) (Respondent herein) 2. Brief facts of the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation. Adjudicating Authority held that the loan was disbursed to the Corporate Debtor to be repayable with interest on demand. IRP issued demand notice dated 29.11.2022 which was to be paid within seven days. Amount having not paid, the date of default was 07.12.2022. It was further held that the letter dated 20.08.2020 is acknowledgment by the Corporate Debtor. It was held that the IRP was duty bound to take steps to protect the Corporate Debtor and recover the dues. Reliance was placed on Section 18 of the Limitation Act, 1963. The Adjudicating Authority held that the financial debt was proved. It was held that there is requisite authorisation for filing a petition. Adjudicating Authority by the impugned order admitted Section 7 application aggrieved by which order, this Appeal has been filed. 3. We have heard Shri Kunal Tandon, Learned Counsel for the Appellant, Shri Rohan Taneja, Learned Counsel for the Respondent No.1 and Shri Manoj Kumar Agarwal, Learned Counsel for the IRP. 4. Learned Counsel for the Appellant submits that the loan having disbursed on 16.12.2016 which was claimed to be repayable on demand, limitation for such loan will be three years as per Article 21 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding amount of debt is Rs. 9,56,83,836/- (Rupees Nine Crore Fifty Six Lakh Eighty Three Thousand Eight Hundred and Thirty Six only). Rs. 3,50,00,000/- (Rupees Three Crore Fifty Lakh Only) being amount towards loans and advances along with interest @ 18% p.a. thereon till 31/12/2022 being Rs. 6,06,83,836/- (Rupees Six Crore Six Lakh Eighty Three Thousand Eight Hundred and Thirty Six Only) The said amount of debt is granted as financial assistance to the Corporate debtor to be repaid as and when demanded by the Financial Creditor. Copy of working for computation of amount and days of default in tabular form is attached herewith and marked as EXHIBIT-E. DATE(S) OF DISBURSEMENT 16th December, 2016 2. AMOUNT CLAIMED TO BE IN DEFAULT AND THE DATE ON WHICH THE DEFAULT OCCURRED (ATTACH THE WORKINGS FOR COMPUTATION OF AMOUNT AND DAYS OF DEFAULT IN TABULAR FORM) AMOUNT CLAIMED TO BE IN DEFAULT The total outstanding amount of debt is Rs. 9,56,83,836/- (Rupees Nine Crore Fifty Six Lakh Eighty Three Thousand Eight Hundred and Thirty Six only). Rs. 3,50,00,000/- (Rupees Three Crore Fifty Lakh Only) being amount towards advance along with interest @ 18% p.a thereon till 31/12/2022 being Rs. 6,06 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wledged that in lieu of the entire outstanding amount we shall ensure allotment of 2 residential premises admeasuring 897 sq. ft each in E-wing at 2nd Floor to you in the project being F Residences Ghatkopar at Chembur, Mumbai which is being currently being developed by a Director of our Company. The present letter by itself shall be treated as letter of allotment for the given area. You are requested to acknowledge this letter as acceptance to the terms of this letter/allotment. M/s. Point Developers Private Limited Director/ Authorized Signatory M/s Rushabh Civil Contractors Pvt Ltd. Director/ Authorized Signatory Arihant Realtors Partner Accepted as agreed above 12. Thus, Financial Creditor has successfully proved that there is a financial debt. 13. The second submission which has been pressed by the Counsel for the Appellant is that the application is barred by time. Counsel for the Appellant submits that the loan has been disbursed on 16.12.2016 which was payable on demand. Article 21 of the Limitation Act shall be attracted which provide for limitation of three years from the date when the loan is made. It is useful to refer Article 21 of the Schedule of the Limitation Act, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred in law in reversing the judgment and order of the earlier adjudicating authority. The adjudicating authority rightly rejected the application as barred by limitation. The appellate authority patently erred in law in reversing the decision of the adjudicating authority and admitting the application. 15. In the present case, we have already noted the letter dated 20.08.2020 which was filed by the corporate debtor in the reply to Section 7 application. Reliance has been placed on the said letter by the Appellant also in the present Appeal. The letter dated 20.08.2020 contained a promise to repay the outstanding amount. Even for arguments sake, if we accept that three years period as per Article 21 came to end on 15.12.2019, the letter dated 20.08.2020 is clear promise by the corporate debtor to make the payment and as per Section 25 of the Indian Contract Act, 1872, the corporate debtor is bound by the said promise and fresh period of limitation shall commence from 20.08.2020. Section 25 of the Indian Contract Act, 1872, is as follows:- 25. Agreement without consideration, void, unless it is in writing and registered or is a promise to compensate for something done or is a promis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to pay the whole or part of a debt, which the creditor might have enforced, but for the limitation of a suit in law. A written promise to pay the barred debt is a valid contract. Such a promise constitutes novation and can form the basis of a suit independent of the original debt, for it is well settled that the debt is not extinguished, the remedy gets barred by passage of time as held by this Court in Bombay Dyeing Mfg. Co. Ltd. v. State of Bombay [Bombay Dyeing Mfg. Co. Ltd. v. State of Bombay, AIR 1958 SC 328] . 32. Section 25(3) applies only where the debt is one which would be enforceable against the defendants, but for the law of limitation. Where a debt is not binding on the defendant for other reasons, and consequentially not enforceable against him, there is no question of applicability of Section 25(3). 17. Section 25(3) is attracted when a promise is made by letter to make the payment of a time barred debt. In view of Section 25(3), the said promise is enforceable and the promise in writing given by the corporate debtor in letter dated 20.08.2020 will make the said promise enforceable within a period of three years and the application which was filed by the financial cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d One Hundred Nine only) outstanding in the books of Rushabh Civil Contractors Private Limited from you. Dear sir, We are concerned from our client Mr. Debi Prasanna Sarangi, Interim Resolution Professional of Rushabh Civil Contractors Private limited. Under the instructions of our client we hereby state as follows; 1. We say that the Corporate Insolvency Resolution Process (CIRP) was initiated against Rushabh Civil Contractors Private Limited (hereinafter referred as to the Corporate Debtor ). By virtue of order dated 27th June 2022 as passed by the Hon'ble National Company Law Tribunal, Mumbai Branch, Mumbai under Mr Rajesh Mittal, insolvency Professional was appointed as the Interim Resolution Professional of the Corporate Debtor. 2. We further say that by virtue of order dated 22 August 2022, passed by the Hon'ble National Company Law Tribunal, Mumbai Bench, Mumbai our client Mr. Debi Prasanna Sarangi was appointed as Interim Resolution Professional in place of Mr Rajesh Mittal. 3. We say that on perusal of the books of accounts and records of the Corporate Debtor, our client has noticed that loans and advances of Rs.4,74,48,109 (Rupees Four Crore Seventy-four Lakh Fort ..... X X X X Extracts X X X X X X X X Extracts X X X X
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