AI Structured Summary
Not yet generated for this judgment
Judgment
O R D E R
(Per: Justice Rakesh Kumar Jain)
28.09.2022: This appeal is directed against the order dated 13.03.2020 passed by the Adjudicating Authority (National Company Law Tribunal, Indore Bench at Ahmedabad) by which an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (in short ‘Code’) by Respondent No. 1 has been admitted.
The Appellant is the suspended director of M/s Krishna Oils & Proteins Pvt. Ltd. (Respondent No. 2)/Corporate Debtor who is aggrieved against the order of admission.
Shorn of unnecessary details, the Corporate Debtor availed various financial assistance from the Financial Creditor/Respondent No. 1. The account of the Corporate Debtor was classified as NPA on 02.08.2014. The Financial Creditor initiated the proceedings under the SARFAESI Act, 2002 and also filed an application under Section 7 of the Code before the Adjudicating Authority. In part ‘IV’ of the application the date of default has been mentioned as 02.08.2014. The application was contested before the Adjudicating Authority by the Appellant on the ground that the same is barred by limitation having been filed on 13.03.2019 because the limitation to file the application is of three years as provided in Article 137 of the Limitation Act, 1963 (in short ‘Act’) which triggers on the date when the right to apply accrues. However, the Adjudicating Authority rejected the contention of the Appellant on the ground that there are entries in its account maintained by the Respondent No. 1 dated 25.01.2017 and the application under Section 7 of the Code has been filed on 13.03.2019, therefore, it was within the period of limitation counting the same from 25.01.2017.
Counsel for the Appellant vehemently argued that the said amount has been credited by the ECGC and not by the Appellant. It is therefore, submitted that his case does not fall either under Section 18 or 19 or even Section 20 of the Act for the purpose of extension of limitation on account of the alleged acknowledgement.
On the other hand, Counsel for Respondent has submitted that though the amount credited in his account on 25.01.2017 by the Respondent tantamounts to acknowledgment but even otherwise, the balance sheets of the Appellant up to the year 2018 shows the amount to be claimed by the Respondent and therefore, it is an acknowledgement in view of the decisions of the Hon’ble Supreme Court in the case of ‘Asset Reconstruction Company (India) Limited Vs. Bishal Jaiswal & Anr.’ 2021 SCC Online SC 321 and ‘Dena Bank (now Bank of Baroda) Vs. C. Shivakumar Reddy & Anr.’ 2021 10 SCC 330.
In rebuttal, Counsel for the Appellant has admitted that the balance sheets, referred to, by the Respondent were before the Adjudicating Authority being part of record but has submitted that he was not given ample opportunity to explain the same. However, he has conceded before us that the same being on record of the company, cannot be denied.
We have heard Counsel for the parties and perused the record with their able assistance.
The Appellant contested the application filed under Section 7 of the Code before the Adjudicating Authority only on the ground of limitation.
His precise case was that since the date of default mentioned in part ‘IV’ of the application is 02.08.2014 and the application under Section 7 has been filed on 13.03.2019, therefore, it was beyond the period of three years and was thus, barred by limitation.
He has argued that the entry of credit dated 25.01.2017 cannot be attributed to the Appellant as it has been made at the instance of 3rd party and does not fall in any of the provisions of the limitation Act much less Section 18 and 20 of the Act. We are not dealing with this aspect of the matter for the reasons that during the course of hearing, Counsel for the Respondent has drawn our attention towards the balance sheets of the Appellant, available on record of the Adjudicating Authority, in which the amount claimed by the Respondent has been duly reflected.
Once the amount is reflected in the latest balance sheets pertaining to the year 2017-18, the decisions in the case of Dena Bank (Supra) and Bishal Jaiswal (Supra) applies with full force in which it has been held that the entries in books of accounts and/or balance sheets of a corporate debtor would amount to an acknowledgement under Section 18 of the limitation Act.
No other point has been raised.
In view of the aforesaid facts and circumstances, we do not find any material in the present appeal for the purpose of interference in the order of the Adjudicating Authority and hence, the present appeal is hereby dismissed. No costs.