NCLAT (12.05.2021) in Lakshmi Narayan Sharma, Vs. Punjab National Bank & Anr. [Company Appeal (AT) (CH) (Insolvency)No.01 of 2021] held that;
# 32. To be noted, that Section 18 of the Limitation Act, 1963 does not enjoin that an ‘acknowledgement’ has to be in any particular form or to be express. It must be borne in mind that an ‘acknowledgement’ is to be examined resting upon the attendant circumstances by an admission that the writer owes a ‘Debt’. No wonder, an ‘Unconditional Acknowledgement’ implies a promise to pay because that is the natural inference if there is no other contrary material.
Excerpts of the Order;
# 1. The Appellant has preferred the present Appeal as an ‘Aggrieved Person’, against the ‘Impugned Order’ dated 18.01.2021 passed by the ‘Adjudicating Authority’ (National Company Law Tribunal, Hyderabad Bench, Hyderabad) in C.P.(IB)No.599/7/HDB/2019.
# 2. The ‘Adjudicating Authority’ National Company Law Tribunal, Hyderabad Bench, Hyderabad while passing the ‘Impugned Order’ dated 18.02.2021 in C.P.(IB).No.599/7/HDB/2019 (filed by the 1st Respondent/Bank/ Petitioner/Financial Creditor under Section 7 of the I & B Code) at Paragraph 10 had among other things observed that the ‘Financial Creditor’ had established the ‘debt and default’ through various documents filed along with the Applications and ultimately, admitted the ‘Application’ by declaring the ‘Moratorium’ and issued necessary directions thereto.
Appellant’s Contentions:
# 8. The Learned Counsel for the Appellant takes a stand that since the ‘Date of Default’ for all the facilities by the 1st Respondent/Punjab National Bank as per Part-IV of the Application under Section 7 of the Code was on 30.03.2016 and that the limitation lapsed on 29.03.2019. In any case, the date of ‘Non-Performing Asset’ was on 30.06.2016. The limitation period resting upon ‘NPA’ expired on 29.06.2019. As such, it is the submission of the Learned Counsel for the Appellant that the Application filed by the 1st Respondent/Punjab National Bank (under Section 7 of the I & B Code) is barred by ‘Limitation’, as the same was filed on 18.07.2019 or any date thereafter.
# 9. The Learned Counsel for the Appellant emphatically contends that if the ‘Date of Default’ is considered as the date from which the limitation starts running then, the Petition under Section 7 of the I & B Code is barred by 111 days or more and if date of ‘NPA’ is considered to be date from which the limitation starts running then, the Petition is barred by 19 days or more.
# 10. The Learned Counsel for the Appellant submits that the ‘Adjudicating Authority’ has no jurisdiction to admit the ‘Corporate Debtor’ for ‘Corporate Insolvency Resolution Process’ in spite of the fact the same being barred by ‘Limitation’.
# 13. The Learned Counsel for the Appellant submits that the ‘impugned order’ is a ‘nullity’ in the eye of Law, because of the fact that the ‘Adjudicating Authority’ had not decided the ‘issue of limitation’.
1st Respondent’s Submissions:
# 15. The Learned Counsel for the 1st Respondent/Bank contends that the Appellant had not filed two vital documents viz. the ‘Balance and Security Confirmation Letter’ dated 20.02.2018 executed by the ‘Corporate Debtor’. Further, on behalf of the 1st Respondent/Bank, attention of this ‘Tribunal’ drawn to the ‘Balance Security Confirmation Letter’ dated 20.02.2018 for Rs.78,74,73,945/- and the ‘Balance and Security Confirmation Letter’ dated 20.02.2018 for Rs.4,15,03,499.06, both of them duly signed by the ‘Guarantor(s)’.
# 16. The Learned Counsel for the 1st Respondent/Bank brings to the notice of this ‘Tribunal’ that on 15.10.2018, a sum of Rs.15,262.75 was paid by the ‘Corporate Debtor’ to the Credit of the ‘Loan Account’ and the above facts will clearly establish that there was an ‘Acknowledgement of Debt’ as contemplated under Section 18 and 19 of the Limitation Act 1963.
Discussions:
# 25. It is brought to the fore that the 1st Respondent/Bank/‘Financial Creditor’ had issued a notice to the ‘Corporate Debtor’ on 02.06.2016, as per Section 13(2) of the SARFAESI Act and that the ‘Corporate Debtor’ had not paid the debt sum, despite the lapse of 60 days’ time given to it.
# 26. As on 30.06.2019, the outstanding amount due to be paid to the 1st Respondent/‘Financial Creditor’/Bank was Rs.144.03 Crores. The ‘Corporate Debtor’ and the ‘Guarantors’ had executed ‘Balance and Security Confirmation Letters’ dated 20.02.2018 in respect of the accounts of Saptarishi Hotels Pvt. Ltd. thereby acknowledging the ‘debt’ in unequivocal terms. Admittedly, a payment of Rs.15,262.75 was made by the ‘Corporate Debtor’ to the credit of the loan amount.
# 27. On behalf of the ‘Appellant’, the contention raised before this ‘Tribunal’ is that the Application filed by the 1st Respondent/Punjab National Bank (‘Financial Creditor’) is barred by limitation, because of the fact that the application was filed on 18.07.2019 or any date thereafter. Furthermore, it is projected that the ‘Date of Default’ for all the facilities given by the Punjab National Bank in terms of Part-IV of the Application (filed under Section 7 of the I & B Code) is 30.03.2016 and that the limitation came to an end on 29.03.2019. Moreover, the date of ‘Non-Performing Asset’ is 30.06.2013. As such, the Application (under Section 7 of the I & B Code, 2016) filed by the 1st Respondent/Punjab National Bank (‘Financial Creditor’) seeking initiation of ‘CIRP’ was admitted by the ‘Adjudicating Authority’ beyond the specified limitation period of 3 years.
Limitation Act, 1963:
# 32. To be noted, that Section 18 of the Limitation Act, 1963 does not enjoin that an ‘acknowledgement’ has to be in any particular form or to be express. It must be borne in mind that an ‘acknowledgement’ is to be examined resting upon the attendant circumstances by an admission that the writer owes a ‘Debt’. No wonder, an ‘Unconditional Acknowledgement’ implies a promise to pay because that is the natural inference if there is no other contrary material.
# 33. Further, to treat the writing signed by an individual as an ‘Acknowledgement’, the person acknowledging must be conscious of his liability and the commitment ought to be made in respect of that liability.
# 34. Be that as if may, on a careful consideration of respective contentions projected on either side, this ‘Tribunal’ considering the prime fact that the Guarantor(s) in respect of the Accounts of the ‘Corporate Debtor’/M/s.Saptarishi Hotels Private Limited had executed the ‘Balance and Security Confirmation Letters’ dated 20.02.2018 for the due amount of Rs.78,74,73,945/- [Confirmation of Correctness of Debit Balance] and keeping in mind yet another fact that a sum of Rs.15,262.75 was paid by the ‘Corporate Debtor’ on 15.10.2018 and as on 30.06.2019 the due amount was Rs.144,02,51,063.09 comes to an irresistible, inevitable and inescapable conclusion that in respect of the loan account of the ‘Corporate Debtor’, there was an ‘Acknowledgement of Debt’ as per Section 18 and 19 of the Limitation Act, 1963. In fact, the Application filed by the 1st Respondent/‘Financial Creditor’ (Punjab National Bank) in July 2019 (vide intimation given by the 1st Respondent/Bank/Financial Creditor’s Advocate through communication dated 18.07.2019 addressed to the Saptarishi Hotels Pvt. Ltd.[Corporate Debtor]) is perfectly maintainable in Law, of course, well within the period of Limitation. As such, the Contra Plea taken on behalf of the ‘Appellant’ that the Application filed by the 1st Respondent/‘Financial Creditor’ (Punjab National Bank) (under Section 7 of the I & B Code) is barred by limitation is legally untenable and is rejected. In the present case, the 1st Respondent/Bank (‘Financial Creditor’) has proved the existence of ‘Debt and Default’ (vide documents) filed along with the Application under Section 7 of the Code against the ‘Corporate Debtor’ and that the conclusion arrived at in admitting the ‘Application’ by the ‘Adjudicating Authority’ is free from legal infirmities, as opined by this ‘Tribunal’. Resultantly, the ‘Appeal’ fails.
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