Prahalad Kumar Agarwal vs Shri Sikhar Chand Jain

Vinod Kumar Agarwal ...Appellant Versus

State Bank of India & Anr. ...Respondents

With

Company Appeal (AT) (Ins) No. 1247 of 2023 & I.A. No. 4407, 4408 of 2023

IN THE MATTER OF:

Prahalad Kumar Agarwal ...Appellant Versus

State Bank of India & Anr. ...Respondents

Present: For Appellant: Mr. Kunal Godhwani, Ms. Kinjal Chadha, Ms. Aditi Sharma, Advocates. For Respondents: Mr. Siddharth Sangal, Mr. Chirag Sharma, Advocates for R-1/SBI. Mr. Sandeep Bajaj, Advocate for R-2.

ORDER

(Hybrid Mode)

Per: Justice Rakesh Kumar Jain (Oral)

29.08.2024: This order shall decide two appeals bearing Company

Appeal (AT) (Ins) No. 1245 of 2023, filed by Vinod Kumar Agarwal

(hereinafter referred to as the first appeal) and Company Appeal (AT)

Cont'd.../ -2-

(Ins) No. 1247 of 2023, filed by Prahalad Kumar Agarwal (hereinafter

referred to as the second appeal) against the common order dated

31.07.2023 passed by National Company Law Tribunal, Cuttack

Bench by which an application filed by Respondent No. 1 (State Bank

of India). under Section 95 of the Insolvency and Bankruptcy Code,

2016 (in short 'Code) has been admitted.

2. In brief, 'Vandana Vidhyut Limited' secured loan from a

consortium of six banks (including Respondent No.1) in which the

PNB was the lead bank. The said loan was secured by present

appellants in both the appeals along with others as guarantors by

executing a deed of guarantee on 27.10.2010.

3. The principal borrower, namely, Vandana Vidhyut Limited was

admitted into CIRP on 26.04.2021 by the National Company Law

Tribunal, Mumbai on an application filed under Section 7 of the Code

by the State Bank of India/Respondent No.1. It is an admitted fact

that the principal borrower has already gone into liquidation.

4. The present proceedings were initiated at the instance of

Respondent No. 1 by filing an application under Section 95 on

02.12.2021 in terms of provisions of the Code and Rule 7(1) of the Company Appeal (AT) (Ins) No. 1245 & 1247 of 2023 -3-

Insolvency & Bankruptcy (Application to Adjudicating Authority for

Insolvency Process of Personal Guarantors to Corporate Debtors),

Rules, 2019 (in short 'Rules').

5. The said application was contested by the present appellants,

before the Ld. Tribunal, on the ground that the application has been

filed on 02.12.2021 is barred by limitation as the date of default in

the application filed under Section 95 is mentioned as 24.07.2016.

6. It is the case of the appellant that since the date of limitation is

three years in terms of the Article 137 of the Limitation Act, 1963,

(for short 'Act'), the limitation counted from the date of default as

24.07.2016 till the filing of the petition dated 02.12.2021 is clearly

beyond the period of three years. This submission of the appellant

was not accepted by the Tribunal, inter alia, on the ground that

Respondent No. 1 had issued a notice to the appellant on 21.06.2021

to make the payment of the amount within 14 days which expired on

05.07.2021, therefore, counting the limitation from 05.07.2021, the

petition filed on 02.12.2021 was within the period of limitation and

therefore, the Tribunal admitted the application filed under Section

Company Appeal (AT) (Ins) No. 1245 & 1247 of 2023 -4-

95 and appointed Mr. Shikhar Chand Jain as the IRP while imposing

moratorium under Section 100 of the code.

7. Aggrieved against the impugned order, both the appeals have

been preferred by the personal guarantors which came up for

preliminary hearing on 26.09.2023 and in which the following order

was passed:

"26.09.2023: Learned counsel for the Appellant submits that the Adjudicating Authority has admitted the Section 95 application against the Corporate Debtor who was a Guarantor on the ground that notice invoking the guarantee was issued only in the year 2021, hence, the Application under Section 95 is within time. Learned counsel for the Appellant challenging the order contends that the notice under Section 13(2) of the SARFAESI Act was issued on 26.05.2016, in which notice the Personal Guarantor was also asked to pay the defaulted amount, hence, the personal guarantee stood invoked at that time. It is submitted that the Adjudicating Authority erred in holding that the application is not barred by time. Learned counsel for the Respondent submits that there is acknowledgement as on 31.03.2017, hence, application was well within time. Submissions raised by the parties need consideration.

Issue notice. Requisites alongwith process fee be filed within three days.

Respondent may file Reply within two weeks. Rejoinder be filed within two weeks thereafter.

Company Appeal (AT) (Ins) No. 1245 & 1247 of 2023 -5-

List this Appeal on 07.11.2023.

In the meantime, the Resolution Professional may collate claims, however, no further steps shall be taken."

8. Both the respondents have filed the reply to the appeal and

rejoinder has also been filed.

9. While attacking the findings recorded by Ld. Tribunal, on the

issue of limitation, Counsel for the Appellant has vehemently argued

that the Tribunal has committed a patent error in treating the notice

dated 21.06.2021 as the notice invoking the Bank Guarantee which

is otherwise a statutory notice issued under Rule 7 (1) of the Rules in

consonance with Section 95 (4) (b) of the code. It is submitted that

the said notice dated 21.06.2021 was mainly for the purpose of filing

the application under Section 95 as the language of Section 95 (4) (b)

itself suggests that the application under section 95 cannot be filed

until unless the notice is issued. He further submits that Rule 3 (e) of

the Rules provides the definition of the guarantor which says that

"guarantor" means a debtor who is a personal guarantor to a

corporate debtor and in respect of whom guarantee has been invoked

by the creditor and remains unpaid in full or part'. The main thrust

of the argument is that for the purpose of proceedings against a Company Appeal (AT) (Ins) No. 1245 & 1247 of 2023 -6-

guarantor, the guarantee has to be invoked. It is his positive case

that the said guarantee which has been given by the present

appellant by way of guarantee deed 24.07.2016 has not been

invoked. It is submitted that even if there is a notice issued under

section 13(2) of the SARAFESI Act 2002, the said notice cannot

tantamount to be a notice for the purpose of invoking guarantee to

file a petition under Section 95 of the code. In support of his

submission, he has relied upon a decision of this court rendered in

the case of 'Amanjyot Singh V. Navneet Kumar Jain & Ors.', Company

Appeal (AT) (Ins.) No. 961 of 2022 decided on 05.01.2023. He has

also relied upon an another judgment of this court in 'K.M. Sebastine

v. State Bank of India', Company Appeal (AT) (Ins.) No. 1099 of 2024

decided on 18.07.2024 to contend that the default cannot be

attributed to the personal guarantor until unless a notice is given.

10. In reply, counsel for Respondent No. 1 has submitted that there

is no error in the impugned order, firstly, because notice was given to

the appellant on 26.05.2016 of a period of 60 days to discharge its

liability as a guarantor which expired on 24.07.2016. It is further

submitted that the said notice has to be taken as the notice invoking

Company Appeal (AT) (Ins) No. 1245 & 1247 of 2023 -7-

the bank guarantee and the Judgment relied upon by the appellant

that notice under Section 13 (2) cannot be treated to be a notice for

the purpose of invoking the guarantee provided in the guarantee

deed is not applicable as it has been decided on different facts.

11. He has further submitted that even otherwise the petition

having been filed on 02.12.2021 is within the period of limitation

because of the acknowledgment on the part of the appellant as

guarantors. In this regard, he has referred to the balance sheet

which has been brought on record by the appellant in its reply which

has been signed by both the appellants on 01.09.2017 in which the

liability towards the bank has been clearly shown. It is submitted

that if the period is to be counted from the date of signing of balance

sheet on 01.09.2017 then the period of 3 years would expire on

01.09.2020 which falls during the period of covid-19 and the appeal

has been filed on 02.12.2021 during the period when the period of

limitation had stopped running. He has further submitted that in so

far as Rule 7 (1) is concerned, it is submitted that by issuing that

notice, the appellants were asked to make the payment of the

amount due within a period of 14 days. It is argued that the said

Company Appeal (AT) (Ins) No. 1245 & 1247 of 2023 -8-

Rule is akin to Rule 8 of the code which is for the purpose of filing of

an application under Section 9. It is argued that an application

under Section 9 has to be filed, notice under Section 8 has to be

given enabling the corporate debtor to make the payment.

12. Mr. Bajaj, appearing on behalf of Respondent No. 2, has also

submitted that guarantee deed is a continuing guarantee, therefore,

it could have been invoked by virtue of notice issued under Rule 7 (1)

of the rules. Otherwise, he has submitted that by the notice issued

on 26.05.2016 the appellant have been categorically asked to

discharge their liability as guarantors within the period of 60 days,

therefore, that has to be treated as a notice issued for the purpose of

invoking guarantee.

13. We have heard counsel for the parties and perused the record

with their able assistance.

14. There is no dispute that the appellant extended their personal

guarantee for the facilities availed by the Corporate Debtor. The

relevant part of the guarantee deed dated 27.10.2010 are reproduced

as under:

Company Appeal (AT) (Ins) No. 1245 & 1247 of 2023 -9-

"If at any time default shall be made by the Borrower in

payment of the Loan as aforesaid together with interest, costs,

charges, expenses and other money for the time being due to

the Lenders in respect of or under the Common Loan

Agreement, the Guarantors shall forthwith on demand pay to

the Lenders the whole of such. Loan together with Interest

costs, charges, expenses and/or money as may be then due to

the Lenders and shall Indemnify and keep Indemnified the

Lenders against all losses of the aforesaid Loan, Interest or

other monies due and all coats, interest, charges, expenses and

other money whatsoever which the Lenders may incur by

reason of any default on the part of the Borrower.

The Guarantee herein contained is a continuing one for all

amounts advanced by the Lenders to the Borrower in respect of

or under the Common Loan Agreement and shall not be

determined or in any way be affected by any account or

accounts opened or to be opened by the Lenders becoming nil or

coming into credit at any time or from time to time or by reason

of the said account(s) being closed and fresh account(s) being

opened in respect of any other facility being granted to the

Borrower.

Company Appeal (AT) (Ins) No. 1245 & 1247 of 2023 -10-

The Guarantors agree that any admission or acknowledgment

in writing signed by the Borrower of the liability or

indebtedness of the Borrower or otherwise in relation to the

aforementioned Loan or any part payment as may be made by

the Borrower' towards the Loan hereby guaranteed or any

Judgment, award or order obtained by the Lenders against the

Borrower shall be binding on the Guarantors and the

Guarantors accept the correctness of any statement of account

that may be served on the Borrower which is duly certified by

the Lenders or any of them and the same shall be binding and

conclusive as against the Guarantors also and the Guarantors

further agree that in the Borrower making an acknowledgment

or making a payment, the Borrower shall in addition to its

personal capacity be deemed to act as the Guarantors' duly

authorized agent in that behalf for the purposes of Sections 18

and 19 of the Limitation Act, 1963.

The Guarantors agree that the Loan hereby guaranteed shall be

payable to the Lenders on the Lenders or any of them serving

the Guarantors with a notice requiring payment of the Loan and

such notice be deemed to have been served on the Guarantors

either by actually delivery thereof to the Guarantors or by

despatch thereof by Registered Post or Certificate of Posting to

the Guarantors addresses herein given or any other address in Company Appeal (AT) (Ins) No. 1245 & 1247 of 2023 -11-

India to which the Guarantors may by written intimation have

given to the Lenders. Any notice dispatched by the Lenders or

any of them by Registered Post or Certificate of Posting to the

address to which it is required to be dispatched under this

Clause shall be deemed to have been duly served on the

Guarantors four days after the date of posting thereof, and

shall be sufficient if signed by any officer of any of the Lenders

and in proving such service it shall be sufficient if it is

established that the envelope containing such notice,

communication or demand was property addressed and put

into the post."

15. The notice issued on 26.05.2016 was at the instance of five

banks including Respondent No. 1 and in that notice it has been

categorically averred that:

"Simultaneously you notices Nos. 2, 3, 4 & 5 are aware that

you have by a guarantee / joint guarantee guaranteed payment

on demand of all moneys and discharge all obligations and

liabilities then or at any time thereafter owing or incurred to us

by M/s Vandana Vidhyut Ltd.

We have to inform you notices Nos. 2, 3, 4 & 5 that the

borrower has committed defaults in payment of his liabilities

Company Appeal (AT) (Ins) No. 1245 & 1247 of 2023 -12-

and consequently the accounts have been classified as non-

performing asset. Since the borrower has committed defaults, in

terms of the guarantee you have become jointly and severally

liable to pay to us the outstanding amount of loan/credit

facilities aggregating, and we hereby invoke the guarantee and

call upon you to pay the said amount within 60 days from the

date of this notice. Please note that interest will continue to

accrue at the contracted rate until payment in full. We further

give you notice that failing payment of the above amount with

interest up to the date of payment, we shall be at liberty to

exercise all or any of the rights under sub-section (4) of section

13 of the said Act, which please note.

This may further be noted that this Notice under Section 13(2)of

SARFAESI Act is being issued on behalf of 5 lenders of

consortium of banks, as detailed above, out of total 6 lenders as

one of the lenders has assigned their share to M/s Edelweiss

ARC Ltd. As such, M/s Edelweiss has the right to issue the

notice, if required, separately under the consortium."

16. In so far as, the acknowledgement in the balance sheet is

concerned, the appellants have admitted its liability, which is as

below:

Company Appeal (AT) (Ins) No. 1245 & 1247 of 2023 -13-

Company Appeal (AT) (Ins) No. 1245 & 1247 of 2023 -14-

Company Appeal (AT) (Ins) No. 1245 & 1247 of 2023 -15-

"Note 33:-

(A) Loan accounts of the Company have been classified as non-

performing assets by the bankers. The Company has submitted

reconstructing proposal to all the bankers and demanded for waiver

of interest besides restructuring of loan. Since loan accounts have

become npa, the Company has not recognised the interest and other

claims of banks which is disputed at this point of time and to that

yent lost and bankers loan liability has been understated. The impact

of the same will be given at the time of final settlement.

The extent of exact overdue interest is under determination and

reconciliation with the banks.

The balances of bank are not being confirmed/ reconciled as banks

treated the loan accounts as NPA Account.

(B) As per decision made in CDR Empowered Group meeting on

21.03.2016, the company has exit from approved CDR package

(C) Lenders have adjusted some FDRs against their outstanding

liabilities without the consent of the Company. Management is

condending for the same. The Company has not taken the effect of the

same in books of accounts. Interest provision on the FDRs has not

been done, the impact of the same will be given after settlement with

the banks.

Company Appeal (AT) (Ins) No. 1245 & 1247 of 2023 -16-

Note-34:-

(A) The Punjab National Bank (PNB) along with other consortium

banks i.e. State Bank of India, Allahabad Bank, Bank of India and

Central Bank of India, has issued a notice under Section 13 of

SARFAESI Act, 2002 vide letter dated 22nd October 2016, regarding

exercise of symbolic possession on account of non-payment of debts.

(B) Punjab National Bank and other Consortium Banks had filed

Original Applications against the Company before the Debt Recovery

Tribunal, Jabalpur (DRT") under section 19 of the Recovery of Debts

due to Banks and Financial Institution Act, 1993. In that respect the

DRT has issued show cause notice to the company on dated

12.06.2017."

Company Appeal (AT) (Ins) No. 1245 & 1247 of 2023 -17-

17. Thereafter, Respondent No. 1 issued a notice on 21.06.2021

under Rule 7 (1) of the Rules in which it has been averred that this

demand notice is in regard to unpaid debt in default of the Corporate

Debtor. The said averment is as under:-

Company Appeal (AT) (Ins) No. 1245 & 1247 of 2023 -18-

"The undersigned request you to unconditionally pay the unpaid

debt in default in full within fourteen days from the receipt of this

letter failing which insolvency resolution process, under the Code,

shall be initiated against you."

18. Since the application has been filed under Section 95, therefore,

it is relevant to refer to Section 95 of the code which is reproduced as

under:-

"Section 95: Application by creditor to initiate insolvency resolution process.

*95. (1) A creditor may apply either by himself, or jointly with other

creditors, or through a resolution professional to the Adjudicating

Authority for initiating an insolvency resolution process under this

section by submitting an application.

(2) A creditor may apply under sub-section (1) in relation to any

partnership debt owed to him for initiating an insolvency resolution

process against--

(a) any one or more partners of the firm; or

(b) the firm.

(3) Where an application has been made against one partner in a

firm, any other application against another partner in the same firm Company Appeal (AT) (Ins) No. 1245 & 1247 of 2023 -19-

shall be presented in or transferred to the Adjudicating Authority in

which the first mentioned application is pending for adjudication and

such Adjudicating Authority may give such directions for

consolidating the proceedings under the applications as it thinks

just.

(4) An application under sub-section (1) shall be accompanied with

details and documents relating to--

(a) the debts owed by the debtor to the creditor or creditors

submitting the application for insolvency resolution process as on

the date of application;

(b) the failure by the debtor to pay the debt within a period of

fourteen days of the service of the notice of demand; and

(c) relevant evidence of such default or non-repayment of debt.

(5) The creditor shall also provide a copy of the application made

under sub-section (1) to the debtor.

(6) The application referred to in sub-section (1) shall be in such

form and manner and accompanied by such fee as may be

prescribed.

Company Appeal (AT) (Ins) No. 1245 & 1247 of 2023 -20-

(7) The details and documents required to be submitted under sub-

section (4) shall be such as may be specified."

19. Similarly, counsel for the appellant has referred to Rule 7 of the

rules and the definition of the guarantors, therefore, we refer to Rule

7 (1) which reads as under:-

"Application by creditor.― (1) A demand notice under clause (b)

of sub-section (4) of section 95 shall be served on the guarantor

demanding payment of the amount of default, in Form B."

20. After giving the particulars of the documents which are

appended with the application and also the provisions which are

invoked for the purposes of contesting the impugned order, the

question which arises for consideration is as to whether the

application filed under Section 95, at the instance of Respondent No.

1, is within the period of limitation if it is to be counted from the date

when the notice under Section 13(2) was issued on 26.05.2016 and

or on the basis of the acknowledgement in the balance sheet which

was signed by both the appellants on 01.09.2017.

21. Counsel for the appellant has argued before us today that

notice issued under Section 13(2) on 26.05.2016 cannot be equated Company Appeal (AT) (Ins) No. 1245 & 1247 of 2023 -21-

with a notice which is required for the purpose of invoking personal

guarantee in terms of the guarantee deed. Whereas while arguing

this case before this Court on 26.09.2023 he had made the

submission that the personal guarantee was invoked on 26.05.2016

while issuing the notice under Section 13(2). We are totally amazed

with the diametrically opposite arguments raised by the appellants

before the same court, firstly, when the stay order was obtained and

then when the case was finally argued. If it was argued before this

Tribunal on 26.09.2023 that the notice dated 26.05.2016 was for the

purpose of invoking personal guarantee then how the appellant can

argue before this court today that the said notice was not for the

purpose of invoking the personal guarantee and cannot be used. It

appears that while preparing his case, the appellant came across a

decision of this court rendered in the case of Amanjyot Singh V.

Navneet Kumar Jain & Ors. (supra) to take a summersault from his

earlier stand and argue the case in such a faishon.

22. We do not want to say much about the act and conduct of the

appellant but before we proceed further we would like to discuss the

Company Appeal (AT) (Ins) No. 1245 & 1247 of 2023 -22-

Judgment which has been relied upon in the case of Amanjyot Singh

V. Navneet Kumar Jain & Ors. (supra).

23. The facts in the case of Amanjyot Singh (supra) are that the

Corporate Debtor M/s Gulati Retail India Ltd. had obtained financial

facilities from Punjab and Sind Bank and ICICI Bank Ltd. Amanjyot

Singh was one of the personal guarantors of the financial facilities

extended by Punjab and Sind Bank. The Punjab and Sind Bank

issued a notice under Section 13 (2) of the Act on 04.10.2023 to both

the corporate debtor and the guarantors. By the said notice, they

were called upon jointly and severally to make the payment and

discharge their liability with interest with effect from 01.10.2023.

Amanjyot Singh, being the guarantor, himself filed an application

under Section 94 of the code to initiate the CIRP.

24. It was his case that since he has committed a default in making

the payment in response to the notice dt. 04.10.2023 issued under

Section 13(2) of the act, therefore, application filed under Section 10

by the Corporate Debtor deserves to be admitted. In this background,

this court has made the following observations:

Company Appeal (AT) (Ins) No. 1245 & 1247 of 2023 -23-

9. The learned Counsel for the Appellant may be right in his

submission that by virtue of notice issued under Section 13, sub-

section (2) dated 04.10.2013, the Appellant was also asked to make

the payment of dues, but the undisputed fact is that apart from

notice dated 04.10.2013, no steps have been taken by the Bank to

recover any dues from the Appellant. The default, if any, committed

by the Appellant was in October 2013, when notice was received by

the Appellant. When we come to the order passed by the

Adjudicating Authority, it is relevant to notice that in the report

submitted by the RP, applicability of the Limitation Act was also

noticed. In paragraph 3 at Item No.6, following was reported by the

RP:

"6. Applicability of Limitation Act: The Notice dated 4th

October, 2013 issued by Punjab and Sindh Bank (PSB) under

SARFAESI Act, 2002. Thereafter, no other notice has been

issued by PSB to the Personal Guarantor. A guarantor is

liable to pay if the principal debtor defaults. The creditor has

to enforce the guarantee within the limitation period

stipulated under the limitation act. As per article 55 of

limitation act 1963, the time-limit of 36 months would be

reckoned from the date the guarantee contract is breached.

The breach of contract occurs if the payment is not made or

refused 'on demand'."

Company Appeal (AT) (Ins) No. 1245 & 1247 of 2023 -24-

10. The RP came to the conclusion that the Bank has not invoked the

guarantee.

11. In its reply, the Bank has submitted that although after sale of

the mortgaged asset, part of the facility was realized, but no steps

have been taken by the Bank against the Appellant for recovery of

any dues. The notice, which is the basis of the Application, was

issued on 04.10.2013. Nine years have been passed from issuance

of the notice and no steps have been taken by the Bank so far for

recovery of any amount from the Appellant. Default, which is

claimed by the Appellant, at best can be said to be a technical

default and when substantially, no steps have been taken by the

Bank and the Bank's categorical case is that guarantee of the

Appellant has not been invoked, it is the Bank, who after invoking

the guarantee shall proceed against the Appellant.

12. We, thus, are satisfied that foundation which was laid down by

the Appellant for initiating the CIRP against the Appellant, was not

sufficient to admit Section 94 Application and initiate the CIRP

against the Appellant. We may further notice that Section 10

Application against the Corporate Debtor has already been admitted

and CIRP against the Corporate Debtor had been initiated. The case

taken up by the Bank being categorical and clear that no steps have

been taken by the Bank against the Appellant, there is no cause for

Company Appeal (AT) (Ins) No. 1245 & 1247 of 2023 -25-

the Appellant to pray for initiation of CIRP against the Appellant -

the Personal Guarantor. We, thus, do not find any good ground to

interfere with the impugned order in this Appeal. The Appeal is

accordingly dismissed. No costs.

25. In our considered opinion, the appellant has wrongly relied

upon the aforesaid decision and has changed his stand so

conveniently during the course of final arguments which he had

otherwise taken at the time when stay was granted because at that

time it was the case of the appellant that the notice dt. 26.05.2016 is

for invoking the personal guarantee.

26. Be that as it may, if the notice dated 26.05.2016 is treated to be

the notice invoking the personal guarantee, the question arises as to

whether the petition having been filed on 02.12.2021 is still within

the period of limitation?

27. In this regard, reference may be had to the balance sheet which

has been filed by none other than the appellants, signed on

01.09.2017, for the acknowledgement of debt. Section 18 of the

Limitation Act, 1963 is reproduced as under:-

"18. Effect of acknowledgment in writing.--

Company Appeal (AT) (Ins) No. 1245 & 1247 of 2023 -26-

(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 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.

28. Section 18 provides for acknowledgement in writing and the

balance sheet indicating the liability is the acknowledgement in

writing.

Company Appeal (AT) (Ins) No. 1245 & 1247 of 2023 -27-

29. It is also pertinent to mention that the balance sheet has been

signed by the both the appellants herein and it has been held by the

Hon'ble Supreme Court in Civil Appeal No. 323 of 2021 in the case of

Asset Reconstruction Company (India) Ltd. v. Bishal Jaiswal & Anr.

that the admission of liability in the financial statement i.e. balance

sheet indicates the debt from the date when it is signed. Since the

balance sheet was signed on 01.09.2017, therefore, counting the

limitation from 26.05.2016 to 01.09.2017, the period of three years

would again start running from 01.09.2017 and shall come to an end

on 31.08.2020. This date i.e. 31.08.2020 happens to fall during the

period of covid 2019 for which the Hon'ble Supreme Court has

passed an order in Suo Motu 3/2020 order dated 01.01.2022 that if

the limitation expires during this period then it shall continue to run

till 01.03.2022 and an additional period of 90 days shall also be

available in particular circumstances.

30. Since the period of limitation to file petition under Section 95 by

Respondent No. 1 was expiring during the period protected by

Hon'ble supreme Court, therefore, it cannot be said that this

Company Appeal (AT) (Ins) No. 1245 & 1247 of 2023 -28-

application which has eventually been filed on 02.12.2021 was

beyond the period of limitation.

31. Thus, in view of the aforesaid facts and circumstances we are of

the considered opinion that there is hardly any merit in the present

appeals and hence, both the aforesaid appeals are hereby dismissed.

No costs.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Mr. Indevar Pandey] Member (Technical)

sa/rr

Company Appeal (AT) (Ins) No. 1245 & 1247 of 2023