Jm Financial Asset ... vs Usha Rajendra Agrawal

JM Financial Asset Reconstruction ...Appellant(s) Company Ltd.

Versus

Ankit Rajendra Agarwal ...Respondent(s) Present: For Appellant : Mr. Aayush Agarwala, Mr. Kunj Mehra, Mr. Yash Dhruva, Ms. Ruchita Jain, Advocates. For Respondents : None With Comp. App. (AT) (Ins) No. 1357 of 2024

IN THE MATTER OF:

JM Financial Asset Reconstruction ...Appellant(s) Company Ltd.

Versus

Rajendra Prasad Agrawal ...Respondent(s) Present: For Appellant : Mr. Aayush Agarwala, Mr. Kunj Mehra, Mr. Yash Dhruva, Ms. Ruchita Jain, Advocates. For Respondents : None

With Comp. App. (AT) (Ins) No. 1358 of 2024

IN THE MATTER OF:

JM Financial Asset Reconstruction ...Appellant(s) Company Ltd.

Versus

Usha Rajendra Agrawal ...Respondent(s) Present: For Appellant : Mr. Aayush Agarwala, Mr. Kunj Mehra, Mr. Yash Dhruva, Ms. Ruchita Jain, Advocates. For Respondents : None With Comp. App. (AT) (Ins) No. 1359 of 2024

IN THE MATTER OF:

JM Financial Asset Reconstruction ...Appellant(s) Company Ltd.

Versus

Atul Rajendra Agrawal ...Respondent(s) Present: For Appellant : Mr. Aayush Agarwala, Mr. Kunj Mehra, Mr. Yash Dhruva, Ms. Ruchita Jain, Advocates. For Respondents : None

ORDER

(Hybrid Mode) 12.03.2025: These four appeals are against four orders, all similar and

all dated 08.05.2024, passed by the Ld. NCLT, Mumbai in four Company

Petitions bearing CP (IB) No. 969/MB/2022; CP (IB) No. 986/MB/2022; CP

(IB) No. 971/MB/2022; CP (IB) No.985/MB/2022.

2. The Respondent in the present appeals have been served and an

affidavit of service is filed on record but none appeared on behalf of the

Respondent, hence are proceeded ex-parte.

3. It is the submission of the Ld. Counsel for the Appellant even before the

Ld. NCLT none appeared on behalf of the Respondent. In any case since no

one is appearing on behalf of the Respondent we proceed to hear all these

appeals.

4. It is the submission of the Ld. Counsel for the Appellant the Company

Petitions have been dismissed by the Ld. NCLT on the grounds of limitation

as enunciated in paragraph 29 below:

"29. Moreover, in light of the fact that the date of default falls during the Covid-19 period, we have to take cognizance of the Hon'ble Supreme Court's decision in Suo Motu Writ Petition No. 03 of 2020. In the Present matter, the date of One Time Proposal for settlement is 19.07.2018, therefore the limitation period comes to an end on 19.07. 2021. In view of the aforesaid decision of the Hon'ble Supreme Court iterated herein above, the Applicant was entitled to a further period of 90 days, to file the Petition. The said period of 90 days comes to an end on 31.05.2022, however the date of e-filing the Petition is 30.08.2022. Hence, the present Petition is not maintainable as it is absolutely barred by limitation".

5. It is submission of the Ld. Counsel for the Appellant the Ld. NCLT has

missed out clause (iii) of paragraph 5 of Suo Motu Writ Petition (C) No. 3 of 2020

in Re: Cognizance for Extension of Limitation.

6. It is submitted the Ld. NCLT had acted on the premise that only 90 days

period was available with the appellant to file the Company Petition but

whereas per sub clause (iii) of paragraph 5, balance period of one year four

months and three days were available as on 15.03.2020 to the appellant to

file the appeal and the limitation in the present case for the appellant for filing

this Company Petition would have expired on 04.07.2023 and that these

petitions were filed on 25.08.2022, well within time.

7. We have gone through the impugned order.

8. In Re: Cognizance for Extension of Limitation in Suo Motu Writ Petition

(C) No. 3 of 2020, the Hon'ble of Supreme Court held as under:

"5. Taking into consideration the arguments advanced by learned counsel and the impact of the surge of the virus on public health and adversities faced by litigants in the prevailing conditions, we deem it appropriate to dispose of the M.A. No. 21 of 2022 with the following directions:

I. The order dated 23.03.2020 is restored and in continuation of the subsequent orders dated 08.03.2021, 27.04.2021 and 23.09.2021, it is directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi-

judicial proceedings.

II. Consequently, the balance period of limitation remaining as on 03.10.2021, if any, shall become available with effect from 01.03.2022.

III. In cases where the limitation would have expired during the period between 15.03.2020 till 28.02.2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01.03.2022. In the event the actual balance period of limitation remaining, with effect from 01.03.2022 is, greater than 90 days, that longer period shall apply.

IV. It is further clarified that the period from 15.03.2020 till 28.02.2022 shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings".

(Emphasis Supplied)

9. Even in 'Mrs. Rita Kedia vs. Ashika Global Securities Pvt. Ltd. & Anr.' in

CA (AT) (Ins) No. 1536 of 2023 dated 29.11.2024 this issue has been decided

as under:

"13. The Learned Counsel for the Appellant had also raised defence regarding limitation. The application under Section 7 of the IBC, 2016 was filed on 30.05.2022. The Appellant itself as Director of the Corporate Debtor had acknowledged the debt in the ledger accounts of Financial Year 2016-17, 2017- 18 and 2018-19 through confirmation of accounts including the last dated 01.04.2019 appearing at page 104 of the Appeal Paper Book. The three year period, since the acknowledgement, expired on 31.03.2022. However, as per the direction of the Hon'ble Supreme Court in Suo Moto Writ Petition No. 3 of 2020 decided on

10.01.2022, the period from 15.03.2020 till 28.02.2022 is to be excluded for counting of limitation under any law. Excluding the said period, the present petition under Section 7 was filed within the limitation period by the Financial Creditor".

10. Considering the submissions made by the Counsel for the Appellant

and also that since the cause of action in the present matter arose on

19.07.2018 and that the balance period of limitation available as on

15.03.2020 was one year, four months and three days per sub clause III of

paragraph 5 of Suo Motu Writ Petition (C) No. 3 of 2020, the limitation in the

present case would have expired only on 04.07.2023 and that the petitions

filed on 25.08.2022 were all well within time. Hence, the appeals are admitted.

The impugned orders are set aside and all the matters are remanded to the

Ld. NCLT, Mumbai Bench to hear the matter afresh on merits.

11. The appellants to appear before the Ld. NCLT on 14.04.2025.

12. All four appeals are thus disposed of. Pending applications if any, in all

the four appeals also stand disposed of.

[Justice Yogesh Khanna] Member (Judicial)

[Ajai Das Mehrotra] Member (Technical) sr/md