NCLT ND (2025.12.01) in Central Bank of India Vs. P.L.B. Infrastructure Pvt. Ltd. [(2025) ibclaw.in 3053 NCLT, I.A. No. 1202/ND/2025 in C.P. (IB) No. 14 (ND)/2025] held that;
The right to sue accrues when a default occurs. If the default has occurred over three years prior to the date of filing of the application, the application would be barred under Article 137 of the limitation Act save and except where the delay can be condoned under Section 5 of the Limitation Act.
The Hon’ble Supreme Court in Asset Reconstruction Company (India) Ltd. vs Bishal Jaiswal, (2021) 6 SCC 366 held that entries in balance sheets can amount to acknowledgment of debt only if such entries are clear and unqualified, and if made before expiry of the original limitation period.
Hon’ble Supreme Court in Gaurav Hargovindbhai Dave v. Asset Reconstruction Company (India) Ltd., (2019) 10 SCC 572, para 6-7, held that the limitation for IBC proceedings runs from the date of NPA and not from any subsequent action such as DRT proceedings or recovery measures.
The pendency of proceedings before the Debt Recovery Tribunal (T.A.No.401/2022) does not save the limitation period under the IBC, as settled that IBC is not a substitute for recovery proceedings but a process triggered only upon an existing default.
Excerpts of the Order;
# 1. This Application has been filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 by Central Bank of India (“Financial Creditor/Applicant”) seeking initiation of the Corporate Insolvency Resolution Process (‘CIRP’) against M/s P.L.B. Infrastructure Private Limited (‘Corporate Debtor/Respondent’).
# 2. The Corporate Debtor/Corporate Guarantor i.e., M/s P.L.B. Infrastructure Private Limited was incorporated on 21st December 1911, having CIN: U99999MH1911PTC000337 under the Companies Act, 1956. Its registered office is at Shop no. 403, 4th Floor, 2633-2634, Bank Street, Karol Bagh, Delhi – 110005, therefore, this Bench has jurisdiction to deal with this petition.
# 3. The total amount of default alleged in Part-IV of the application preferred under Section 7 is Rs. 75,75,86,509/-. The Date of default occurred as submitted is shown as 30.04.2024.
# 4. CONTENTIONS OF THE APPLICANT
i. The Applicant through consortium arrangement had sanctioned a sum of Rs. 15 Crore to the M/s Shree Raj Mahal Jewellers Private Limited through lead Bank, Bank of India vide sanction letter dated 20.01.2014. The details of the credit facilities sanctioned by the Bank of India, Federal Bank, Central Bank of India and Corporation Bank and State Bank of Travancore and State Bank of Patiala were as hereunder:
Fund Based Limits - Total commitment (FB+NFB): Rs. 125.00 Crores
ii. It is submitted that to secure the due repayment of balances from time to time due’ in the aforesaid credit facilities of Rs. 125.00 Crores, together with all interest, cost, charges” and expenses, the Corporate Debtor, personal guarantors and corporate guarantors executed various necessary security document in favour of and delivered to the Applicant Bank i.e., Bank of India the consortium leader. The details of the documents executed by the Corporate Debtor, personal guarantors and corporate guarantors were as under:
A. Sanctioned letter no. 80/2013-14-205 Dt. 20/01/2014 for Rs. 15.00 Crores issued by Financial Creditor namely Central Bank of India in respect of its sanction of the credit facilities in the name of the Corporate Debtor M/s Shree Raj Mahal Jewellers Pvt. Ltd. duly accepted by the authorized signatory/director of the Defendant No.1
B. Certified true copy of the resolution passed by the board of directors of the M/s Shree Raj Mahal Jewellers Pvt. Ltd. on 14/05/2014 accepting inter alia the terms and conditions sanctioned by Bank of India, State Bank of Patiala, Federal Bank, State Bank of Travancore, Central Bank of India & Corporation bank and also authorized inter alia Sh. Pradeep Goel and Smt. Ginni Devi directors of the company to execute all such documents on behalf of the company as may be necessary to avail the sanctioned credit facility.
C. Certified true copy of the resolution passed by the board of directors of M/s PLB Infrastructure Pvt. Ltd., on 14/05/2014 accepting inter alia the terms and conditions sanctioned by Bank of India, State Bank of Patiala, Federal Bank, State Bank of Trayancore, Central Bank of India & Corporation Bank and also authorized inter alia Sh. Ashok Goel directors of the company to sign the deed of guarantee etc. and to create the mortgage of company’s immovable properties.
D. Working capital consortium agreement dated 19/05/2014 executed in between Shree Raj Mahal Jewellers Pvt. Ltd. and Bank of India (leader of the consortium), State Bank of Patiala, State Bank of Travancore, Federal Bank, Central Bank of India & Corporation Bank duly signed by authorized signatories/directors of the company in respect of the credit facilities of the consortium banks total amounting to Rs. 125.00 Crores.
E. Inter-Se agreement dated 19/05/2014 executed in between Bank of India, State Bank of Patiala, State Bank Travancore, Federal Bank Ltd., Central Bank of India & Corporation Bank containing the term and conditions inter alia the inter-se rights and obligation of all of consortium Lenders.
F. Stamped authority/declaration dated 19/05/2014 duly signed by the authorized signatories of the State Bank of Patiala, State Bank of Travancore. The Federal Bank Ltd., Central Bank of India & Corporation Bank confirming inter alia to nominate, appoint and constitute the Bank of, India as lawful and true attorney on their behalf and to do/execute and perform all acts, deeds and thinks as deem appropriate necessary as the lead Bank of Bank of India consortium.
G. Joint deed of hypothecation dated 19/05/2014 executed by Shree Raj Mahal Jewellers Ltd. Defendant No.1 in favour of Bank of India, State Bank of Patiala, State Bank of Travancore, The Federal Bank Limited, Central Bank of India & Corporation Bank in respect of the charge of the respective banks on the hypothecated securities/ assets of the Corporate Debtor M/s. Shree Raj Mahal Jewellers Pvt. Ltd.
H. Stamped undertaking/declaration dated 19/05/2014 duly signed by the Corporate Debtor M/s. Shree Raj Mahal Jewellers Pvt. Ltd. and its guarantors/mortgagors confirming interalia that the company has not given any consideration or remuneration/commission for giving/continuing of the said guarantee in favour of Bank of India.
I. Deed of guarantee dated 19.05.2014 for Rs. 125 Crores duly signed by (i) Sh. Praveen Gupta, (ii) Sh. Pradeep Goel, (iii) Smt. Ginni Devi, (iv) Sh. Ashok Kumar Goel (v) Sh. Jai Singh Goel.
J. Corporate Deed of guarantee dated 19/05/2014 for Rs.15 Crores duly signed by M/s PLB Infrastructure Private Limited through its authorized signatory/director Sh. Pradeep Goel.
K. Revival letter dated 19/05/2014 duly signed by Corporate Debtor, personal guarantors and corporate guarantors acknowledging and confirming the execution of the documents for the purpose of section 18 of Indian Limitation Act, 1963 and in order to preclude any question being raised and limitation regarding liability to the bank and the members bank for the payment of outstanding liability under the CC account and other accounts duly signed by the Corporate Debtor, personal guarantors and corporate guarantors.
L. That as a further security to the aforesaid credit facility sanctioned and disbursed by all Bank of member of consortium and other member banks, Sh. Praveen Gupta, Sh. Pradeep Goel, Sh. Jai Singh Goel, M/s PLB Infrastructure Pvt. Ltd., through its authorized signatory/directors extended the equitable mortgage inter alia in favour of the consortium member’s bank including Financial Creditors in respect of their various immovable properties.
iii. While availing the aforesaid Loan/Credit Facilities, the Corporate Debtor, personal guarantors and corporate guarantors have not maintained certain financial discipline and miserably failed to adhere to the same. The true details of the business and financial position are malafidely not disclosed by the Corporate Debtor, personal guarantors and corporate guarantors to the Members of consortium including financial Creditor. The Corporate Debtor, personal guarantors and corporate guarantors failed and neglected to repay the dues and interest in the account and the said accounts were grossly out of order, as such the accounts became N.P.A. on 08.11.2015 with the Central Bank of India.
iv. The Financial Creditors issued a notice under Section 13(2) of the SARFAESI Act, 2002 on 03.02.2016 to the Principal Borrower, personal guarantors and corporate guarantors and recalled the credit facilities.
v. Subsequently, the Bank of India along with Financial Creditors filed Original Application before Debt Recovery Tribunal-II, Delhi (now transfer Application No. 401 of 2022 listed for final argument before Debt Recovery Tribunal-III, Delhi).
vi. It is submitted that the last AGM had been done by the corporate guarantor on 30.09.2023 and last date of balance sheet was 31.03.2023 by which Corporate Guarantor had acknowledged the debt of financial creditor. Thereafter the petition has been filed by Financial Creditor on 25.12.2024.
vii. The total amount claimed to be in default from the Corporate Debtor/Corporate Guarantor by the Financial Creditor is Rs. 75,75,86,509/- as till the date of filing of the petition.
viii. The Principal Borrower is already in liquidation. Since the RP has admitted the claim of the Financial Creditor. As such the present petition is within limitation.
# 5. Notice was served to the Respondent through speed post and publication by order of this Adjudicating Authority. Despite repeated calls, none appeared on behalf of the Respondent, as recorded vide order dated 13.08.2025.
# 6. We have heard the Learned Counsels for the Financial Creditor and perused the averments made in the application and affidavits.
# 7. Since the registered office of the Corporate Debtor is in Delhi, this Tribunal which has territorial jurisdiction over the Union Territory of Delhi, is the Adjudicating Authority in relation to the prayer for initiation of Corporate Insolvency Resolution Process in respect of the respondent Corporate Debtor under Section 7 of the Code.
# 8. This Adjudicating Authority vide order dated 06.10.2025 reserved the matter on the issue of maintainability.
# 9. It is contended by the Financial Creditor that a credit facility of Rs. 15 crore was sanctioned to Shree Raj Mahal Private Limited under a consortium arrangement on 20.01.2014 wherein the Respondent stood as corporate guarantor by executing a corporate deed of guarantee dated 19.05.2014. Thereafter, the account of the principal borrower was classified as NPA on 08.11.2015 and the Financial Creditor issued a demand notice under Section 13(2) of the SARFAESI Act on 03.02.2016 invoking the corporate guarantee.
# 10. On perusal of the records, it is observed that the Financial Creditor furnished untenable date in Part-IV of the application. The application mentions the date of default as 2024, whereas the account was declared NPA in 2015, and Section 13(2) notice of the SARFAESI Act was issued in 2016. Further, there are multiple inconsistencies in the Financial Creditors pleadings regarding critical dates. The DRT order records the NPA date as 11.08.2015, whereas the present application mentions it as 08.11.2015. The Financial Creditor has itself admitted that the actual default occurred in 2016, and subsequently filed an interlocutory application seeking to amend the default date to 2014 instead of 2024. These shifting and contradictory dates demonstrate that the petition lacks a clear and definite date of default as required under Section 7 of the IBC. Moreover, whether 2014 or 2016 is considered, the petition is hopelessly barred by limitation.
# 11. As per Article of the limitation Act, 1963, the limitation period for applications under Section 7 of the IBC is three years from the date of default.
# 12. The principal was conclusively laid down in B.K. Educational Services Pvt. Ltd v. Parag Gupta & Associates, (2019) 11 SCC 633, where the Hon’ble Supreme Court held:
“The right to sue accrues when a default occurs. If the default has occurred over three years prior to the date of filing of the application, the application would be barred under Article 137 of the limitation Act save and except where the delay can be condoned under Section 5 of the Limitation Act.”
# 13. In the present case, the Applicant itself admits that the date of default is 03.02.2016 (the date of issuance of notice under Section 13(2) of the SARFAESI Act). Consequently, the limitation expired on 02.02.2019 unless extended by a valid acknowledgement under Section 18 of the Limitation Act, 1963.
# 14. The Applicant seeks to rely on an alleged acknowledgement of debt in the balance sheet of the Corporate Guarantor for FY 2022-23 to contend that the limitation stands extended. The Financial Creditor, however, has not produced any evidence that the said acknowledgment was made within the original limitation period (i.e., prior to February 2019).
# 15. The Hon’ble Supreme Court in Asset Reconstruction Company (India) Ltd. vs Bishal Jaiswal, (2021) 6 SCC 366 held that entries in balance sheets can amount to acknowledgment of debt only if such entries are clear and unqualified, and if made before expiry of the original limitation period. Thus, in the present case, the balance sheet of 2023 was executed long after the expiry of limitation in 2019, and therefore cannot revive a time barred debt.
# 16. Similarly, the Hon’ble Supreme Court in Gaurav Hargovindbhai Dave v. Asset Reconstruction Company (India) Ltd., (2019) 10 SCC 572, para 6-7, held that the limitation for IBC proceedings runs from the date of NPA and not from any subsequent action such as DRT proceedings or recovery measures.
# 17. The pendency of proceedings before the Debt Recovery Tribunal (T.A.No.401/2022) does not save the limitation period under the IBC, as settled that IBC is not a substitute for recovery proceedings but a process triggered only upon an existing default.
# 18. However, the default occurred on 03.02.2016. The petition was filed on 24.12.2024 i.e., after eight years, without any valid acknowledgment within three years of the default. The so-called acknowledgement in the 2023 balance sheet, even if accepted cannot extend the limitation as it was made after the debt had already become time-barred.
# 19. Hence, in view of the above discussion, this bench holds that the present petition is barred by limitation and is liable to be dismissed. Accordingly, the petition filed by M/s Central Bank of India under Section 7 of the Code against M/s PLB Infrastructure Pvt. Ltd., is dismissed as being barred by limitation. No order as to costs.
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