Sanjay Ramakant Kudapkar Vs. Syndicate Bank & Anr. - One Time Settlement Offer amounts to acknowledgment of debt under Section 18 of the Limitation Act giving extended time of limitation.

NCLAT (13.12.2021) in Sanjay Ramakant Kudapkar Vs. Syndicate Bank & Anr. [Company Appeal (AT) (Insolvency) No. 1013 of 2021] held that;.

• Hon’ble Supreme Court in ‘Dena Bank (now Bank of Baroda) Vs. C. Shivakumar Reddy & Another’, has held that One Time Settlement Offer amounts to acknowledgment of debt under Section 18 of the Limitation Act giving extended time of limitation.

Excerpts of the Order;

13.12.2021: Heard Learned Counsel for the Appellant. This Appeal has been filed by Ex-Director of the Corporate Debtor against whom the CIRP has been initiated by order dated 16.09.2021 by the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench. The Application was filed by the Financial Creditor for default of amount of Rs.11,65,41,666.41/-. The submission which was raised by the Corporate Debtor is that the Application was barred by time. It is submitted that in the Application, the date of default is mentioned as 31.03.2013 and Application having been filed after three years thereafter is barred by time.

 

# 2. The Learned Adjudicating Authority has considered the submissions and returned finding that in view of the One Time Settlement (OTS) offer which was given by the Corporate Debtor on 30.03.2016 and further letter dated 17.08.2016 there shall be extension of limitation.

 

# 3. Learned Counsel for the Appellant contends that even if it is accepted that there was proposal for One Time Settlement that could not be treated to be acknowledgment of the entire debt. Hence, the Application of the Financial Creditor was wrongly admitted which should have been dismissed as barred by time.

 

# 4. We have considered submissions of Learned Counsel for the Appellant and perused the record. There is no dispute that from the Application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (in short ‘Code’) it was clear that the date of default is 31.03.2013. The One Time Settlement which was offered by the Corporate Debtor was on 30.03.2016 for Rs.3,33,39,801/-. On 17.08.2016, the Corporate Debtor has written a letter to the Financial Creditor for extension of three months’ time for submission of the OTS amount. The Learned Adjudicating Authority after taking the aforesaid two dates in consideration, when offer for settlement was made by the Corporate Debtor, held the Application of the Financial Creditor within time.

 

# 5. We are of the view that the Adjudicating Authority has rightly relied on the Judgment of Hon’ble Supreme Court in ‘Dena Bank (now Bank of Baroda) Vs. C. Shivakumar Reddy & Another’, where the Hon’ble Supreme Court has held that One Time Settlement Offer amounts to acknowledgment of debt under Section 18 of the Limitation Act giving extended time of limitation. We, thus, are of the opinion that Application under Section 7 was rightly admitted by the Adjudicating Authority not being barred by limitation. We, thus, do not find any merit in this Appeal. The Appeal is dismissed.

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