M/S Sone Obra Enterprises Pvt Ltd vs J Umashanker & Co. Pvt. Ltd

Company Appeal (AT) (Ins.) No. 280 of 2023 IN THE MATTER OF: Sone Obra Enterprises Pvt. Ltd. ...Appellant

Versus

J. Umashankar & Company Pvt. Ltd. ...Respondent

Present: For Appellant: Mr. Saurabh Pandey, Mr. Shivam Kumar, Advocates For Respondents: Mr. Anirudh Wadhwa, Mr. Debarshi Chakraborty, Advocates and Mr. Rohit Sharma, PCS.

ORDER

17.04.2023: Heard Learned Counsel for the Appellant. This appeal has

been filed against the order dated 22.12.2022 passed by the Adjudicating

Authority (National Company Law Tribunal, Kolkata Bench), by which

application under Section 9 filed by the appellant has been rejected as barred

by time, Section 9 application was filed by the Appellant claiming operational

debt of Rs.1,99,94,021/-. In Part-IV the date of default was mentioned as

30.06.2016, the application under Section 9 was filed before the Adjudicating

Authority on 08.06.2022, the Adjudicating Authority has rejected the

application as barred by time.

2. Learned Counsel for the Appellant contends that the appellant had

continued to work with the Respondent even after 30.06.2016, hence, he shall

be entitled for extension of limitation under Section 18 of the Limitation Act,

1963. It is submitted that admission of the jural relationship by the Corporate

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Debtor with the appellant is sufficient to extend the limitation. He, however,

submits that there was no pleading in the Section 9 application regarding any

extension of limitation under Section 18. Learned Counsel for the appellant has

also placed reliance on the Judgment of the Supreme Court in Tilak Ram and

Ors. Vs. Nathu and Ors. [AIR 1967 SC 935].

3. We have considered the submissions of the Learned Counsel for the

appellant and perused the record.

4. The date of default admittedly in the application is 30.06.2016 which is

clear from Part-IV of the application. The application was filed on 08.06.2022

which was clearly beyond three years.

5. Submission of the counsel for the appellant is that he will be entitled for

extension of Section 18 of the Limitation Act, 1963 because the appellant

continues to work and respondent accepted the jural relationship even

subsequently. Section 18 of the Limitation Act, 1963 provides as follows:

(1) Where, before the expiration of the prescribed period for a suit of application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed.

(2) Where the writing containing the acknowledgment is undated, oral evidence may be given of the time when it was signed; but subject to the provisions of the Indian Evidence Act, 1872 (1 of

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1872), oral evidence of its contents shall not be received.

Explanation.--For the purposes of this section,--

(a) an acknowledgment may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment, delivery, performance or enjoyment has not yet come or is accompanied by a refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to set-off, or is addressed to a person other than a person entitled to the property or right;

(b) the word "signed" means signed either personally or by an agent duly authorised in this behalf; and

(c) an application for the execution of a decree or order shall not be deemed to be an application in respect of any property or right.

6. The Section 18 contemplates acknowledgment of the debt in writing so as

to give extension for the purposes of limitation.

7. Present is the case where there is no acknowledgment by the Respondent

nor any such acknowledgment has been pleaded in the application. The

submission that jural relationship continued is not sufficient to accept any

extension of Section 18. The Judgment of the Supreme Court in Tilak Ram Vs.

Nathu has considered the law and laid down following in Paragraph 10,11,12:

"10. It is not, however, necessary to go into the details of these

decisions or to decide which of the two views is correct as this

Court in Shapur Fredoom Mazda v. Durga Prosad, , has

examined the contents and the scope of Section 19. After first

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stating the Ingredients of the section, this Court stated that an

acknowledgment may be sufficient by reason of Explanation 1

even if it omits to specify the exact nature of the right.

Nevertheless, the statement on which a plea of acknowledgment

is based must relate to a subsisting liability. The words used in

the acknowledgment must indicate the jural relationship between

the parties and it must appear that such a statement is made

with the intention of admitting that jural relationship. Such an

intention, no doubt, can be inferred by implication from the nature

of the admission and need not be in express words. It was then

observed:- "If the statement is fairly clear then the intention to

admit the jural relationship may be implied from it. The

admission in question need not be express but must be made

circumstances and in words from which he Court can reasonably

infer that the per- on making the admission intended to refer to a

subsisting liability as at the date of the statement."

11. The Court also observed that stated generally the Courts

leaned in favour of a liberal construction of such statements

though that would not mean that where no admission was made

one should be inferred or where a statement was made clearly

without intending to admit the existence of jural relationship such

as intention would be fastened on the maker of the statement by

an involved or a far-fetched process of reasoning. Similarly, while

dealing with an admission of a debt, Fry L. J. in Green v.

Humphreys, (1884) 26 Ch D 474 at p. 481, observed that an

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acknowledgment would be an admission by the writer that there

was a debt owing by him either to the receiver of the letter or to

some other person on whose behalf the letter was received but

that it was not enough that he referred to a debt as being due

from somebody. In order to take the case out of the statute there

must, upon a fair construction of the letter read by the light of the

surrounding circumstances, be an admission that the writer

owed the debt.

12. The right of redemption no doubt is of the essence of and

inherent in a transaction of mortgage. But the statement in

question must relate to the subsisting liability or the right

claimed. Where the statement is relied on as expressing jural

relationship it must show that it was made with the intention of

admitting such jural relationship subsisting at the time when it

was made. It follows that where a statement setting out jural

relationship is made clearly without intending to admit its

existence an intention to admit cannot be imposed on its maker

by an involved or a far-fetched process of reasoning.

8. Paragraph 12 of the judgment itself clearly mentioned that in admitting

the jural relationship subsisting without intending to admit its existence an

intention to admit any debt cannot be accepted the acknowledgment within

meaning of Section 18.

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9. The present is the case where application was clearly barred by time and

there is no acknowledgment as per Section 18, hence, no extension of

limitation can be claimed by the appellant. Appeal is without any merit and the

same is dismissed.

[Justice Ashok Bhushan] Chairperson

[Mr. Barun Mitra] Member (Technical)

sa/nn

Company Appeal (AT) (Ins.) No. 280 of 2023