Basishtha Narayan Choubey vs International Asset Reconstruction Company Pvt. Ltd. & Anr.

[Justice Mr. Rakesh Kumar Jain (Oral)]

11.01.2024 This appeal is directed against the order dated 21.09.2022 passed by the National Company Law Tribunal, Kolkata Bench ( in short ‘Adjudicating Authority’) in CP (IB) No. 08/KB/2020, filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (the "Code"), by Respondent No. 1-International Asset Reconstruction Company Private Limited, which has been admitted.

Shorn of unnecessary details, Counsel for Appellant submits that two loans were granted by the IDBI Bank and the Bank of Baroda of Rs. 4.17 Crores on 27.03.1995 and Rs. 1.35 Crores on 17.03.1998 respectively.

It is further submitted that the IDBI Bank declared the account of the Corporate Debtor as non-performing assets (NPA) on 30.09.2000 and Bank of Baroda declared the account as NPA on 22.03.2002 respectively. It is submitted that both the banks assigned their debt to the Financial Creditor on 31.03.2010 and 22.01.2011 respectively.

It is also submitted that the Corporate Debtor requested the Financial Creditor to restructure the loan on 29.01.2011 as per which the ‘One time settlement’ (in short ‘OTS’) was arrived at between the parties and the Corporate Debtor had to pay Rs.2.4 Crores on various dates.

It is submitted that the Corporate Debtor defaulted in complying with the OTS and therefore, the account of the Corporate Debtor was again declared NPA by the Financial Creditor on 31.12.2012.

It is argued that since the property of the Corporate debtor was mortgaged with the bank, therefore, the proceedings were initiated under Section 13(2) of the SARFAESI Act by issuance of notice dated 11.01.2013 and 25.01.2013. The Corporate Debtor filed reply to the notice on 29.03.2013 and ultimately challenged the SARFAESI proceedings before the Hon'ble Patna High Court in a Writ Petition No. 4748/2013.

While the aforesaid Writ Petition was pending, there was a settlement again between the parties which turned into an OTS on 13.03.2014 as per which the Appellant had to pay Rs. 2.5 Crores as against the earlier amount of Rs. 2.4 Crores.

Be that as it may, it is submitted that the Appellant deposited Rs. 50.00 Lakhs on 09.04.2014 with the Financial Creditor in terms of the Order passed by the Hon'ble Patna High Court, however, the Financial Creditor withdrew the OTS on 01.08.2014 because there was default on the part of the Appellant in making the payment of the OTS amount.

Despite the fact that the OTS was withdrawn on 01.08.2014, the Appellant kept on depositing the OTS amount in tranches i.e., on 26.03.2018 and 10.09.2018 and in this process deposited Rs. 1.80 Crores. It is also submitted that a post dated cheque of Rs. 70 Lakhs was bounced and a separate proceeding was initiated by the Respondent/ Financial Creditor under Section 138 of the Negotiable Instruments Act, 1881.

It is also submitted that the Corporate Debtor was in BIFR w.e.f 2005 and those proceedings were abated on 24.01.2014.

Counsel for the Appellant further submitted that the Appellant had basically challenged the Impugned Order on the issue of Limitation. It is submitted that the application under Section 7 of the Code came to be filed on 12.12.2019 whereas the loan account of the Appellant was declared NPA on 30.09.2000 and 22.03.2002 respectively. Therefore, it is sought to be argued that the period of three year, in so far as the IDBI Bank is concerned, was over on 30.09.2000 and as far as the Bank of Baroda is concerned, was over on 22.03.2002.

It is submitted that the Financial Creditor has not mentioned any date of default in Part IV of the application Form 1 and only said that the amount of default has been calculated as on 31.10.2019.

It is argued that although the plea that the limitation had already expired and the time barred debt could not be claimed by way of petition filed under Section 7 and there cannot be any extension of limitation in terms of Section 18 of the Limitation Act, 1963 as the case can be raised in appeal.

No one has put appearance on behalf of the Respondent.

We have heard Counsel for the Appellant and perused the record with his able assistance. The dispute in this case raised by the Appellant is only in regard to the plea of limitation which has been turned down by the Learned Tribunal while referring to various paragraphs of the Impugned Order and concluding in para 45 that the application filed under Section 7 was within limitation.

We have perused para 32 to 49 of the Impugned Order but suffice it to say that there has been restructuring of debt on 29.01.2011. On the basis of restructuring, the amount of debt was fixed at Rs. 2.4 Crores to be paid by the Appellant which in fact was not paid by the Appellant and the loan account was again declared as NPA on 13.12.2012. Thereafter, another OTS came on 13.03.2014 at the instance of the Appellant for an amount of Rs. 2.5 Crores. The Appellant made the payment from time to time in that account though it is alleged that the OTS was withdrawn on 01.08.2014 but the last payment was made by the Appellant of Rs. 30 Lakhs on 10.09.2018.

In the background of the aforesaid facts and circumstances the issue would be as to whether the Respondent/ Financial Creditor is claiming a time barred debt or the application filed by the Respondent is within the period of limitation.

In the normal circumstances, as projected by the Appellant that the NPA both the accounts were declared NPA on 30.09.2000 and 22.03.2002 by the respective banks and the limitation had expired in the year, 2005 at the most may seems to be attractive but in the present case where the Appellant entered into an agreement of the alleged time barred debt on 29.01.2011 and promised to pay Rs. 2.4 Crores under the OTS, then the limitation would start again in terms of Section 25 of the Contract Act, 1872.

It is needless to mention that there was no intention of the Appellant to make the payment of Rs. 2.5 Crores at that time and therefore, the account of the appellant was again declared NPA on 13.12.2012 but later on again the Appellant entered into an OTS on 13.03.2014 and promised to pay Rs. 2.5 Crores. In the meantime, the Appellant made various payments but the one time settlement was there and during this period also the payments were made of Rs. 50 Lakhs, Rs. 30 Lakhs and also given a cheque that is also the part of payment.

Thus, keeping in view the aforesaid facts and circumstances we are of the considered opinion that there is no error in the Impugned Order passed by the Learned Tribunal so far as the limitation is concerned.

No other point has been raised. In view of the facts and circumstances there is no merit in this case. The Appeal is hereby dismissed. No Costs.