Dhananjay Singh vs Ram Ratan Modi & Anr.

Heard Learned Counsel for the Appellant as well as the Learned Counsel for the Respondent.

This appeal has been filed against the order dated 10.06.2022 by which order, application filed u/s 7 by the State Bank of India has been admitted. The Suspended Director of the Corporate Debtor aggrieved by the order has come up in the appeal.

Learned Counsel for the Appellant challenging the order passed by the Adjudicating Authority contends that the application u/s 7 was barred by time and Adjudicating Authority has wrongly held that application to be within time.

It is submitted after the letter for One Time Settlement which was sent by the Corporate Debtor on 29.11.2016, there is no other event on the basis of which, the extension of limitation can be granted to the State Bank of India whereas the application was filed on 04.11.2020. 5. On 20.11.2016, the application having been filed beyond three years ought to be rejected.

Learned Counsel for the Appellant submits that Adjudicating Authority has thus committed error in admitting section 7 application.

Learned Counsel for the Respondent refuting the submission of Learned Counsel for the Appellant and submits that various proposal for One Time Settlement was made by the Corporate Debtor and in pursuance of the One Time Settlement proposal, payments were also made from time to time which facts have been noticed by the Adjudicating Authority in paragraph 6.2 of the judgement.

Learned Counsel for the Respondent further submits that there has been a decree passed by the Debts Recovery Tribunal in OA which was filed by the Bank against the Corporate Debtor being OA No. 204/2014 arising out of TA No. 404/2014 where final decree was passed on 02.05.2017, copy of which has been brought on record as Annexure R2/3 which is a consent decree and from the said date, the Bank shall have further three years period for limitation which came to an end during the COVID period and by virtue of the judgement of the Hon'ble Supreme Court passed in suo moto writ petition 3 of 2020, the Bank was entitled for a period of limitation and an application has been filed on 04.11.2020 which was during the relevant period and the application cannot be said to be barred by time.

We have considered the submission of the parties and perused the records.

The Adjudicating Authority in its order has referred to the relevant materials which have been relied by both the parties. Admittedly, the NP was declared on 30.06.2013 and before the expiry of three years, there was a request for One Time Settlement in the year 2015, thereafter, the One Time Settlement offer was made by the Corporate Debtor in the year 2016 on several dates and last One Time Settlement proposal was made on 23.11.2016. From the One Time Settlement proposal, admittedly the Bank will have three years period for limitation and before the three years period was expired, the Bank will further get limitation of three years after the passing of the consent decree on 02.05.2017.

There is a reference of the decree 02.05.2017 in the order and it has been correctly mentioned in paragraph 3.3 whereas the date of decree has been wrongly mentioned in paragraph 6.2(iii), the decree being on record, we are of the view that the Appellant is entitled for the benefit of three years from the date of passing of decree as per the judgement of the Hon'ble Supreme Court in Dena Bank. Further, there being order of the Hon'ble Supreme Court in suo moto writ petition 3 of 2020, the application cannot be held to be barred by time and we see no reasons to interfere with the order of Adjudicating Authority admitting section 7 application, there is no merit in the appeal, the appeal is dismissed.