Sanjeev Agraj vs Idbi Bank Limited

Sanjeev Agraj, ...Appellant Suspended Director of M/s. Amzen Transportation Industries Pvt. Ltd.

Versus

IDBI Bank Ltd. & Anr. ...Respondent

Present: For Appellant: Mr. Alok Dhir, Ms. Varsha Banerjee and Udita Singh, Advocates

For Respondent: Advocate Apoorv Agarwal for RP.

Mr. Atul Sharma, Mr. Abhishek Sharma, Ashly Cherian, Mr. Gaurav Arora, Mr. Kamlendra Pratap Singh, Advocates for R-2.

ORDER

(Virtual Mode)

20.05.2022: Heard Learned Counsel for the Appellant.

2. This Appeal has been filed against the Order dated 04.05.2022 passed

by the Adjudicating Authority (National Company Law Tribunal, New Delhi,

Bench-V) by which Order, the Adjudicating Authority has admitted the

Application under Section 7 of the Insolvency and Bankruptcy Code, 2016

(hereinafter referred to as ' The Code') filed by the Financial Creditor.

3. The Financial Creditor had extended Financial Facility to the Corporate

Debtor for a term loan of Rs. 130 Crores. The Account was classified as 'NPA'

on 29.06.2016 thereafter Notice under Section 13(2) of the SARFAESI Act,

2002 was issued and subsequently the Financial Creditor filed the Section 7 2

Application on 06.12.2019. The Counter Affidavit was filed by the Corporate

Debtor to Section 7 Application where plea was taken that the Application

under Section 7 is barred by time since NPA was declared as on 29th June,

2016 and Application was filed three years thereafter. The Rejoinder was filed

by the Appellant before the Adjudicating Authority where the Financial

Creditor has pleaded that after declaration of NPA on 29th June, 2016 the

Corporate Debtor continued to make payment towards the outstanding debt

and payments were made on 05.11.2018, 26.11.2018, 29.11.2018,

07.01.2019, 08.01.2019, 10.01.2019, 19.08.2019 and 02.09.2019 of Rs. 1

Crore. Copies of the Letter sent by the Corporate Debtor to the Financial

Creditor were annexed with the Rejoinder Affidavit. The Adjudicating

Authority after hearing the parties took the view that the Corporate Debtor

having made the payment even upto the year 2019, the Application is not

barred by time.

4. In paragraph 15, the Adjudicating Authority noticed that Corporate

Debtor has made payment lastly as on 02.09.2019 which was continued since

05.11.2018. The Adjudicating Authority held that in view of the last payment

having been made on 02.09.2019 application filed on 06.12.2019 is not

barred by time. Aggrieved by the Order, Appellant has come up in this Appeal.

5. Mr. Alok Dhir, Learned Counsel appearing for the Appellant challenging

the Order pressed two submissions. He submits that the Adjudicating

Authority ought not to have looked into the materials brought in the Rejoinder

Affidavit and the Financial Creditor ought to have amended its Section 7

Application brining on record all the relevant facts and hence the Adjudicating

Authority committed error in relying on the Rejoinder-Affidavit. He further

Company Appeal (AT) Ins. No. 557 of 2022 3

relying on Judgment of Hon'ble Supreme Court in 'Asset Reconstruction

Company (India) ltd. Vs. Bishal Jaiswal & Anr. (Civil Appeal No. 323 of

2021) submitted that for purpose of acknowledgment under Section 18 there

has to be pleading of acknowledgment of liability. He has in support of his

submissions submitted that there being no pleading, the Adjudicating

Authority committed error in holding the Application not barred by time.

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

Appellant and perused the record.

7. In so far as the submissions of Learned Counsel for the Appellant that

the facts were brought only in the Rejoinder-Affidavit which could not have

been looked into, we do not agree with the submissions of Learned Counsel

for the Appellant. Rejoinder-Affidavit is part of the pleadings which was

submitted before the Adjudicating Authority and no error can be said to have

committed by the Adjudicating Authority by relying on the payments which

have been made by the Corporate Debtor lastly on 02.09.2019. We have also

looked into the Section 7 Application which was filed by the Financial Creditor

before the Adjudicating Authority, copy of which Application has been brought

on record by the Appellant itself at page 66, Volume II. The Application under

Section 7 of the Code itself contains the Customer Account Ledger Report

from 31.12.2010 to 04.11.2019 which is part of Section 7 Application. When

we look into Page 134 and 135 of the Appeal Paper Book it is clear that all

payments made by the Corporate Debtor are duly reflected in the aforesaid

ledger report. Last payment of Rs. 1 Crore was made on 02.09.2019 which is

also credited in the Ledger Account. Thus, there were materials also brought

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on record along with the Section 7 Application to prove that payments were

made by the Corporate Debtor upto 02.09.2019.

8. On a pointed query to Learned Counsel for the Appellant regarding

payments, he does not deny that they have made part-payment as recorded

in the Order of the Adjudicating Authority. We are of the view that when the

part-payment are not denied it is not open for the Appellant to even contend

that Application under Section 7 was barred by time. It is a settled law that

from the last payment the limitation of three years shall again begin.

9. Coming to the Judgment which has been relied by the Learned Counsel

for the Appellant i.e. Paragraph 6 of the Judgement of Hon'ble Supreme Court

in 'Asset Reconstruction Company (India) ltd. Vs. Bishal Jaiswal & Anr.' where

following has been observed:

"6. There can be no doubt whatsoever that the appellant has been completely remiss and deficient in pleading acknowledgement of liability on the facts of this case. However, given the staggering amount allegedly due from the respondents, we afford one further opportunity to the appellant to amend its pleadings so as to incorporate what is stated in the written submissions filed by it before the NCLAT, subject to costs of Rs.1,00,000/- to be paid by the appellant to the respondents within a period of four weeks from today."

10. The above case was a case which was deficient in pleading and there

was no acknowledgment of liability hence the Court afforded opportunity to

the Appellant to amend the pleading. Present is the case where in the

Rejoinder-Affidavit there is clear facts stated regarding the acknowledgment

and Section 7 Application details of the payment made by the Corporate

Company Appeal (AT) Ins. No. 557 of 2022 5

Debtor were brought on record therefore present is not a case of deficient

pleading.

11. Coming to the Judgment of Hon'ble Supreme Court in 'Babulal

Vardharji Gurjar Vs. Veer Gurjar Aluminium Industries Pvt. Ltd. & Anr.' (Civil

Appeal No. 6347 of 2019) where Learned Counsel for the Appellant has relied

on Paragraph 33 which is to the following effect:

"33. Apart from the above and even if it be assumed that the principles relating to acknowledgement as per Section 18 of the Limitation Act are applicable for extension of time for the purpose of the application under Section 7 of the Code, in our view, neither the said provision and principles come in operation in the present case nor they enure to the benefit of respondent No. 2 for the fundamental reason that in the application made before NCLT, the respondent No. 2 specifically stated the date of default as '8.7.2011 being the date of NPA'. It remains indisputable that neither any other date of default has been stated in the application nor any suggestion about any acknowledgement has been made. As noticed, even in Part-V of the application, the respondent No. 2 was required to state the particulars of financial debt with documents and evidence on record. In the variety of descriptions which could have been given by the applicant in the said Part- V of the application and even in residuary Point No. 8 therein, nothing was at all stated at any place about the so called acknowledgment or any other date of default."

12. There is no dispute to the preposition that Application under Section 7

should be filed within three years from the date of NPA but if there are

Company Appeal (AT) Ins. No. 557 of 2022 6

materials on record to indicate that there is an acknowledgment within the

meaning of Section 18 of the Code the limitation get extended. The present is

the case where there is acknowledgment within the meaning of Section 18

hence the Limitation got extended hence the Application filed on 06.12.2019

was well within time. No other argument is raised. We do not find any merit

in the Appeal, the Appeal is dismissed.

[Justice Ashok Bhushan] Chairperson

[Ms. Shreesha Merla] Member (Technical)

[Mr. Naresh Salecha] Member (Technical)

Basant/nn

Company Appeal (AT) Ins. No. 557 of 2022