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TMI Blog2022 (11) TMI 1532X X X X Extracts X X X X X X X X Extracts X X X X ..... fault of the another Financial Creditor-IDBI Bank although under Section 7 Sub-Section 1 read with Explanation it is permissible for a Financial Creditor to file Section 7 Application on default committed by the Corporate Debtor of any other Financial Creditor and when factually the Application under Section 7 filed not for the default of IDBI Bank rather the Application is specifically filed confined to the default of the Corporate Debtor of the Financial Facilities extended by the Appellant, we do not find any substance in the submission of Learned Counsel for the Appellant that limitation for filing Section 7 Application be computed on the basis of decree of the IDBI Bank passed in favour of IDBI Bank dated 26th July, 2004. The Decree passed by the DRT dated 26th July, 2004 on the Application filed by the IDBI was not even filed before the Adjudicating Authority and for the first time the decree has been filed along with this Appeal. Mere filing decree in this Appeal shall not entitle the Appellant to compute the limitation for filing Section 7 Application in question on the basis of decree dated 26th July, 2004. The decree dated 26th July, 2004 passed in the O.A. of IDBI is irr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 40/-. On 07th August, 2006, the Corporate Debtor submitted a proposal for One Time Settlement offering an amount of Rs. 13.16 Cr. A notice under Section 13(2) of SARFAESI Act, 2002 was served by the Appellant for repayment of outstanding debt along with interest. On 03.09.2009, Appellant served possession notice. On 04.11.2009, the Corporate Debtor again submitted a proposal for One Time Settlement. Revised OTS Proposal was submitted. On 17th June, 2013 and 06th March, 2019, in Financial Statement of the Respondent year 2018-19 there were acknowledgment of the debt by the Corporate Debtor. On 06th March, 2020, the Financial Creditor filed an Application under Section 7 claiming an amount of Rs. 21,85,19,39,325/- which consisted of principal amount of Rs. 8,68,64,184.29/- rest being interest. The Corporate Debtor did not file any Reply to Section 7 Application. Parties were heard by the Adjudicating Authority on 03rd January, 2022 when the matter was reserved for Orders. Adjudicating Authority passed an Order on 03rd February, 2022 dismissing Section 7 Application as barred by time. The Adjudicating Authority in the Impugned Order considered the question whether the petition under S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the limitation which was not mentioned in Form-A and the enclosures thereto. With regard to argument based on Section 25(3) of the Contract Act, Learned Sr. Counsel submits that no plea was taken before the Adjudicating Authority and for the first time in the Rejoinder-Affidavit filed in this Appeal, Section 25(3) has been referred to. The IBC is a complete Code in itself and has overriding effect on provisions inconsistent with IBC. The provisions of Section 25(3) is inconsistent with Section 238-A even after Order passed by the Adjudicating Authority rejecting Section 7 Application, the Appellant is proceeding under SARFAESI Act. 5. We have considered the submissions of Learned Counsel for the parties and have perused the record. 6. The issue needs to be answered in this Appeal is as to whether the Application filed by the Appellant under Section 7 on 16.03.2020 was barred by time. The law is well settled that limitation for filing the Section 7 Application is limitation as prescribed under Article 137 of the Limitation Act, 1963. Article 137 of the Limitation Act, 1963 is as follows: Description of application Period of limitation Time from which period begins to run 137. Any ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. Section 7(1) is as follows: 7. (1) A financial creditor either by itself or jointly with other financial creditors, or any other person on behalf of the financial creditor, as may be notified by the Central Government may file an application for initiating corporate insolvency resolution process against a corporate debtor before the Adjudicating Authority when a default has occurred. Provided that for the financial creditors, referred to in clauses (a) and (b) of sub-section (6A) of section 21, an application for initiating corporate insolvency resolution process against the corporate debtor shall be filed jointly by not less than one hundred of such creditors in the same class or not less than ten per cent. of the total number of such creditors in the same class, whichever is less: Provided further that for financial creditors who are allottees under a real estate project, an application for initiating corporate insolvency resolution process against the corporate debtor shall be filed jointly by not less than one hundred of such allottees under the same real estate project or not less than ten per cent. of the total number of such allottees under the same real estate project ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 Working Capital Loan 2,00,00,000 3. 02-01- 1990 Term Loan 55,00,000 4. 02-11- 1989 Working Capital Term Loan 1,24,00,000 5. 18-11- 1989 In Land Letter of Credit 30,00,000 6. 20-08- 1985 Deferred payment Guarantee Limit 16,31,752 21-08- 1985 35,69,200 19-12- 1987 63,92,400 Total 6,49,93,352 Note: 1. *The above specified dates are the date on which aforesaid loan/facilities were last sanctioned/extended. 2. Amount claimed to be in default and the date on which the default occurred. The Applicant Financial Creditor claims an amount of Rs. 21,85,19,39,325/- (Rupees Two Thousand One Hundred and Eighty Five Crores Ninteen Lakhs Thirty Nine Thousand Three Hundred and Twenty Five Only) comprising of Rs. 8,68,64,184.29/- as the total principal amount towards the loan facility provided by the Applicant Financial Creditor to Corporate Debtor and interest charged by the Applicant Financial Creditor as per the terms and condition of the loan agreement till 23rd August, 1995 and Rs. 21,76,50,75,140.71 (Rupees Two Thousand One Hundred Seventy Six Crore Fifty Lacs Seventy Five Thousand One Hundred Forty)towards the interest @23.25% pursuant to the decree dated 10th April, 2000 passed by the Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion which was available to the Appellant on the basis of decree of DRT dated 10th April, 2000 came to an end on 09th April, 2003. It is also relevant to notice that acknowledgement claimed by the Appellant by virtue of OTS or any acknowledgement in the Financial Statement are all acknowledgement which are subsequent to expiry of limitation i.e. subsequent to 09th April, 2003. Acknowledgement under Section 18 can be relied on only when acknowledgement is within time and limitation. Section 18(1) of the Limitation Act is clear in this regard which is as follows: 18. Effect of acknowledgement in writing-(1) Where, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgement of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgement was so signed. 14. We thus are of the view that Application filed by the Appellant was clearly barred by time and has rightly been rejected by the Adjudicati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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