NCLAT (14.09.2020) in Yogeshkumar Jashwantlal Thakkar Vs. Indian Overseas Bank, [Company Appeal (AT) (Insolvency) No. 236 of 2020] held that ; Therefore, this Tribunal comes to an inevitable, inescapable and irresistible conclusion that the date of default i.e 01.01.2016 gets extended by the debit confirmation letters secured by the 1st Respondent /Bank from the Corporate Debtor.
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Excerpts of the order;
# 2. The Appellant/Suspended Director of 2nd Respondent has filed the present Appeal being aggrieved against the impugned order passed by the Adjudicating Authority passed by the (‘National Company Law Tribunal, Ahmedabad Bench) in admitting the Section 7 Application of the ‘I&B’ Code filed by the 1st Respondent / Bank.
# 4. Challenging the validity, propriety and legality of the impugned order passed by the Adjudicating Authority (‘National Company Law Tribunal, Ahmedabad Bench), the Learned Counsel for the Appellant submits that the application filed by the 1st Respondent / Bank (‘Financial Creditor’) is time barred and in fact, the said application was filed on 01.04.2019 but the date of default mentioned in Section 7 application before the Adjudicating Authority was on 01.01.2016, therefore, it is the stand of the Appellant that the application filed by the 1st Respondent / Bank after the expiry of three years is hit by the plea of ‘Limitation’.
# 5. The Learned Counsel for the Appellant contends that the Balance confirmation dated 02.09.2016 and ‘Revival Letter’ 31.03.2017 being the acknowledgements relied on by the 1st Respondent / Bank before this Tribunal were not placed before the Adjudicating Authority.
# 7. The Learned Counsel for the Appellant submits that ‘Debit Balance Confirmation’ dated 31.03.2017 does not bear seal/the stamp of the Corporate Debtor and there is one debit confirmation dated 31.03.2017 which was placed on record before the Adjudicating Authority. However, the 1st Respondent/Bankhas not placed the revival letter dated 31.03.2017 on record, before theAdjudicating Authority.
13. The Learned Counsel for the 1st Respondent / Bank takes a plea that the Section 7 Application filed by the Bank before the Adjudicating Authority was well within the period of limitation and that the cause of action arose in favour of the Bank when the default was committed by the ‘Corporate Debtor’ on 01.01.2016. Apart from that, the execution of revival letter dated 31.03.2017 and balance confirmation letter dated 31.03.2017 by the ‘Corporate Debtor’ / Suspended Directors acknowledged the debt within three years from the date of default, which extended the limitation period to 31.03.2020. Also, on the 1st Respondent / Bank side, the decision in ‘Manesh Agarwal’ v. ‘Bank of India & Anr.’ (Company Appeal (AT)(Ins.) No. 1182/2019 is referred to before this Tribunal.
# 16. According to the Learned Counsel for the 1st Respondent / Bank in the present case, there is an acknowledgement of debt by means of executing a revival letter (executed u/s 18 of the Limitation Act) and the same had provided a continuous cause of action’ and gave rise to fresh limitation period in favour of the Bank.
# 18. The Learned Counsel for the 1st Respondent / Bank refers to the decision of Hon’ble Supreme Court in ‘Mobilox Innovations P. Ltd.’ v. ‘Kirusa Software (P) Ltd.,’ 2018 1 SCC at page 353 wherein it is observed that if the Learned Adjudicating Authority is satisfied on the perusal of evidence produced by the ‘Financial creditor’ that at default has occurred and the debt is due, then the application filed u/s 7 of the code is to be admitted, unless the contrary is proved.
# 19. This Tribunal has heard the Learned Counsels appearing for the parties and noticed their contentions.
# 23. It is to be pertinently pointed out that in the decision of Hon’ble Supreme Court ‘Sampuran Singh’ V. Naranjan Singh’ AIR 1999 SC at page 1047 at special page 1050 it is observed that Section 18 of sub-section (1) starts with the words ‘where, before the expiration of the prescribed period for a suit or application in respect of any property or right and acknowledgement of liability in respect of such property or right has been made’.
# 25. In the decision of Hon’ble Supreme Court in ‘Babulal Vardharji Gurjar’ V. ‘Veer Gurjar Aluminium Industries Pvt. Ltd. and Anr.’ (Civil Appeal no. 6357 of 2019 - decided on 14.08.2020) at paragraph 33.1 it is observed as under:-
“33.1 Therefore, on the admitted fact situation of the present case, where only the date of default as’08.07.2011’ has been stated for the purpose of maintaining the application u/s 7 of the Code, and not even a foundation is laid in the application for suggesting any acknowledgement or any other date of default, in our view, the submissions sought to be developed on behalf of the respondent no. 2 at the latest stage cannot be permitted. It remains trite that the question of limitation is essentially a mixed question of law and facts and when a party seeks application of any particular provision for extension or enlargement of the period of limitation, the relevant facts are required to be pleaded and requisite evidence is required to be adduced. Indisputably, in the present case, the respondent No. 2 never came out with any pleading other than stating the date of default as ’08.07.2011’ in the application. That being the position, no case for extension of period of limitation is available to be examined. In other words, even if Section 18 of the Limitation Act and principles thereof were applicable, the same would not apply to the application under consideration in the present case looking to the very averment regarding default therein and for want of any other averment in regard to acknowledgement. In this view of the matter, reliance on the decision in Mahaveer Cold Storage Pvt. Ltd. does not advance the cause of the respondent No.2.”
# 28. It is not out of place for this Tribunal to relevantly point out that the period of Limitation in case of acknowledgement in writing’ starts running from the date of signing the acknowledgement and not after two months from the date of signing as per decision ‘B.Narayana Rao’ V. ‘M.Govinda’ AIR 2004 Andhra Pradesh page 218. Besides this, in the decision ‘K.Jayraman’ V. ‘Sundaram Industries’ reported in AIR 2008 (NOC) Mad. it is observed that ‘acknowledgement of liability should be made before the expiry of the prescribed period for instituting a suit on the basis of original cause of action’.
# 32. It transpires that Director of the 2nd Respondent / Jason Dekor Pvt. Ltd. had confirmed the correctness of the balance of Rs. 14,34,42,101.00 dated 15.10.2013, on 01.11.2013 and over the revenue stamp had affixed his signature. Likewise, the Director of the 2nd Respondent had confirmed the correctness of the balance dated 05.06.2016 and had affixed his signature on 05.06.2016 itself. Likewise, on 20.05.2015 the Director of the 2nd Respondent had confirmed the correctness of the balance in respect of the credit facilities availed by it and the signature was affixed on 20.05.2015. On 02.09.2016 the Director of the 2nd Respondent / ‘Corporate Debtor’ had executed the revival letter to and in favour of the 1st Respondent / Bank. Similarly, on 31.03.2017, on behalf of the 2nd Respondent the borrower(s) / guarantor had affixed his signature over the revenue stamp. All these balance ‘Confirmation Letters’ were issued / given to and in favour of the 1st Respondent / Bank and they belie the stance of the Appellant.
# 36. The Present case centres around mixed question of ‘Facts’ and ‘Law’. The 1st Respondent/Bank, as per the format, as mentioned at para 20 of this judgement, had given the date of ‘Default’ / ‘NPA’ as 01.01.2016 and that the Section 7 of the application of ‘I&B’ Code was filed before the Adjudicating Authority 01.04.2019, by the 1st Respondent / Bank. Prima facie, the Appeal needs to be allowed, if this is the single ground. However, in the instant case, the 1st Respondent/Bank had obtained balance confirmations certificate, the last one being 31.03.2017 as mentioned elaborately in Para 21 of this judgement. Although, this Appellate Tribunal had largely held in ‘Rajendra Kumar Tekriwal’ Vs. ‘Bank of Baroda’ in Company Appeal (AT) (Ins) No. 225 of 2020 and in Jagdish Prasad Sarada Vs. Allahabad Bank in Company Appeal (AT) (Ins) No. 183 of 2020, (both being three Members Bench) had taken a stand that the Limitation Act, 1963 will be applicable to all NPA cases provided, they meet the criteria of Article 137 of the Schedule to the Limitation Act, 1963, the extension of the period can be made by way of Application under Section 5 of the Limitation Act, 1963 for condonation of delay; however, the peculiar attendant facts and circumstances of the present case which float on the surface are quite different where the 1st Respondent / Bank had obtained Confirmations/Acknowledgments in writing in accordance with Section 18 of the Limitation Act periodically. As a matter of fact, Section 18 of the Limitation Act, 1963 is applicable both for ‘Suit’ and ‘Application’ involving ‘Acknowledgment of Liability’, creating a fresh period of limitation, which shall be computed from the date when the ‘Acknowledgment’ was so signed.
# 38. At this stage, this Tribunal, had perused the various confirmation letters as stated supra which are legally valid and binding documents between the inter se parties and the same cannot be repudiated on one pretext or other. Therefore, this Tribunal comes to an inevitable, inescapable and irresistible conclusion that the date of default i.e 01.01.2016 gets extended by the debit confirmation letters secured by the 1st Respondent/Bank from the Corporate Debtor (for making a new period run from the date of debit confirmation letters) towards the outstanding debt in ‘Loan Account’. Indeed, the application under Section 7 of the I&B Code, 2016 was filed by the 1st Respondent/Bank on 01.04.2019 before the ‘Adjudicating Authority’ within the period of Limitation. Furthermore, in view of the fact, that ingredients of Section 18 of the Limitation Act, 1963 are quite applicable both for ‘Suit’ and ‘Application’ and the debit confirmation letters in the instant case were duly acknowledged in accordance with Law laid down on the subject, the instant Appeal deserves to be dismissed and accordingly the same is dismissed,
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