Amit Kumar Agarwal vs Uco Bank & Anr

Sri Amit Kumar Agarwal ...Appellant

Versus

UCO Bank & Anr. ...Respondents

Present:

For Appellant : Mr. Sukanta Sarkar, Mr. Soumya Dutta and Mr. Rajesh Sen, Advocates

ORDER

18.09.2019 This appeal has been preferred by 'Sri Amit Kumar Agarwal',

Director of 'M/s. Kumlai Tea and Industries Ltd.' (Corporate Debtor) against the

order dated 1st August, 2019 passed by the Adjudicating Authority (National

Company Law Tribunal), Kolkata Bench, Kolkata whereby the application under

Section 7 of the 'Insolvency and Bankruptcy Code, 2016' (for short, 'the I&B

Code') filed by UCO Bank (Financial Creditor) has been admitted. Mr. Sukanta

Sarkar, learned counsel appearing on behalf of the Appellant submitted that the

impugned order was passed ex parte without hearing the counsel for the

'Corporate Debtor'. However, from the order-sheet we find that Mr. Sukanta

Sarkar, Advocate appeared and his name has been reflected. It was stated that

though he filed Vakalatnama but on the date of hearing he was not present and 2

for the said reason we have now heard Mr. Sukanta Sarkar, Advocate in detail

on merit of the case.

2. Learned counsel appearing on behalf of the Appellant submitted that the

application under Section 7 of the 'I&B Code' was barred by limitation. Reliance

has been placed on Article 137 of the Limitation Act, 1963. Article 137 relates

to application for which no period of limitation has provided in the Third Division

of the Schedule. The said provision reads as follows:

PART II - OTHER APPLICATIONS

Description of application Period of Limitation Time from which period being to run

137. Any other application Three years When the right to for which no period of apply accrues.

limitation is provided elsewhere in this division

3. Admittedly, the 'UCO Bank' had accrued its right to apply under Section

7 since 1st December, 2016 when the 'Insolvency and Bankruptcy Code, 2016'

came into force. Therefore, we find that Section 7 application is within the period

of limitation.

4. It was next contended by the learned counsel for the Appellant that the

claim of the Respondent - 'UCO Bank' was barred by limitation and thereby 'debt'

was not payable in the eyes of law. However, it is accepted that the 'Corporate

Debtor' mortgaged its property in favour of the 'UCO Bank'.

5. Learned counsel for the Appellant submitted that the default occurred as

back as in 1st October, 2009 and the account was declared as 'Non-Performing

Asset' (NPA) on 23rd April, 2010. However, from the record, we find that the

Company Appeal (AT) (Insolvency) No. 960 of 2019 3

'Financial Creditor' took action under Section 13(2) of the 'Securitisation and

Reconstruction of Financial Assets and Enforcement of Securities Interest Act,

2002 (SARFAESI Act) on 15th June, 2010. In view of the same, the 'Corporate

Debtor' moved before the 'Debt Recovery Tribunal' under Section 17 of the

SARFAESI Act by filing S.A. 91/2011 where the matter remained pending.

6. Apart from the aforesaid fact that there is continuous cause of action and

the 'Corporate Debtor' having mortgaged its property in favour of the UCO Bank,

Article 62 of Part-V of First Division of Schedule of the Limitation Act, 1963 is

applicable, which reads as follows:

PART V - SUITS RELATING TO IMMOVABLE PROPERTY

Description of SUIT Period of Limitation Time from which period being to run

62. To enforce payment of Twelve years When the money money secured by a sued for becomes mortgage or otherwise due.

charged upon immovable property.

7. From the aforesaid facts, we find that there being 12 years limitation

prescribed under the law considering the facts, it cannot be held that the claim

is barred by limitation.

8. The main argument of the counsel is that injustice was done as the

counsel was not given proper hearing by the Adjudicating Authority and order

passed was ex-parte. However, we have heard the case on merit and decide the

appeal. We find no reason to remit the case as it would be a futile exercise.

Company Appeal (AT) (Insolvency) No. 960 of 2019 4

For the reason aforesaid, we are not inclined to interfere with the

impugned order. The appeal is dismissed. No costs.

[Justice S.J. Mukhopadhaya] Chairperson

[ Justice A.I.S. Cheema ] Member (Judicial)

[ Kanthi Narahari ] Member (Technical) /ns/sk

Company Appeal (AT) (Insolvency) No. 960 of 2019