Kotak Mahindra Bank Limited Vs. Ashok Kumar Sachdeva & Ors.- That when a judgment or decree of money is passed or recovery certificate is issued in favour of the financial creditor, it gives rise to a fresh cause of action for the financial creditor to initiate proceedings under Section 7 of the Code.

SCI (2011.02.08) in Kotak Mahindra Bank Limited Vs. Ashok Kumar Sachdeva & Ors. [Civil Appeal No.1215 of 2011] held that;

• That when a judgment or decree of money is passed or recovery certificate is issued in favour of the financial creditor, it gives rise to a fresh cause of action for the financial creditor to initiate proceedings under Section 7 of the Code.

Excerpts of the order;

Learned counsel for the appellant seeks permission to withdraw the present appeal and states that the appellant – Kotak Mahindra Bank Limited will file a fresh petition/application under Section 7 of the Insolvency and Bankruptcy Code, 20161 as the Debts Recovery Tribunal -I, Chandigarh Bench has passed a decree/order dated 09.01.2023 pursuant to which recovery certificate dated 11.01.2023 has been issued.

This Court in “Dena Bank (now Bank of Baroda) Vs. C. Shivakumar Reddy and Another” has held that when a judgment or decree of money is passed or recovery certificate is issued in favour of the financial creditor, it gives rise to a fresh cause of action for the financial creditor to initiate proceedings under Section 7 of the Code. Such proceedings for the Corporate Insolvency Resolution Process can be initiated within a period of three years from the date of judgment/decree or within a period of three years of the certificate of recovery. 

In view of the statement made, the appeal is dismissed as withdrawn.

In case the appellant – Kotak Mahindra Bank Limited files fresh proceedings under the Code, the same will be dealt with in accordance with law.

Pending application(s), if any, shall stand disposed of.

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