Smt. Meena Juneja (Suspended Director ... vs State Bank Of India & Anr
- CitationCompany Appeal (AT) (Insolvency) No. 1076 of 2023
Ratio decidendi
The rule this decision rests on
The limitation period for an application under Section 7 of the Insolvency and Bankruptcy Code is not triggered, or is extended, by an offer of one-time settlement made by the corporate debtor and by the corporate debtor's acknowledgment of the liability in its financial statements; where such acknowledgment or offer falls within the limitation period, the application cannot be held time-barred. A finding that the debt and default under Section 7 are established may rest on the corporate debtor's admission of the debt, as evidenced by its financial statements for the relevant years, a settlement proposal treating the debt as owed, and the default record maintained by the information utility; where the existence of the debt is admitted and the default is shown by such records, the default ingredient of Section 7 stands substantiated.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
IN THE MATTER OF: Meena Juneja ...Appellant
Versus
State Bank of India & Ors ...Respondents
Present: For Appellant : Mr. Abhishek Singh, Mr. Apoorv Khatar and Mr. Vinayak Sharma, Advocates For Respondents : Ms. Renuka Iyer, Mr. Aditya Vashisth, Advocates for SBI Mr. Abhishek Anand, Mr. Karan Kohli and Mr. Jasleen Singh Sandha, Advocates for R-2. ORDER
(Hybrid Mode)
27.03.2024: This appeal has been filed against an order dated
01.08.2023 by which order Adjudicating Authority has admitted Section 7
Application filed by SBI. The Application was filed under Section 7 of IBC for
debt and default of Rs. 29,47,44,198.97 as on 30.06.2022. Adjudicating
Authority found the debt and default and admitted Section 7 Application.
2. Aggrieved by the said order, this appeal has been filed. The learned
Counsel for the Appellant has submitted that the account was declared as NPA
on 28.04.2016 and the application filed on 29.7.2022 was beyond the period of
3 years. Learned Counsel submits that the said was not specifically argued
before the Adjudicating Authority and hence has not been dealt with but
submits that the question of limitation goes to the root of the matter and can be raised in the appeal also. He further submits that he offered OTS twice on
12.10.2018 and 01.06.2022, however, it could not be fructified.
3. We have heard both the sides and perused the records. The first question
needs to examined as to whether the application of SBI was barred by time.
Account was declared NPA on 28.04.2016 and according to the own
submission of the Appellant, OTS was offered on 12.10.2018 and 01.06.2022.
Learned Counsel for the Appellant submits that there was restructuring on
04.01.2027. Adjudicating Authority in the impugned order in paragraph-10
has noticed that in the financial year 2018-19 to 2020-2021, the admission of
liability was there to the Financial Creditor. In paragraph-10 of the impugned
order, following have been observed by the Adjudicating Authority.
..
"10. Furthermore, the Corporate Debtor has nowhere denied the existence of the debt. The Corporate Debtor sent a 'Compromise Proposal' dated 01.06.2022 to the Financial Creditor, wherein, the Corporate Debtor has requested the Financial Creditor to enter into a settlement by offering Rs. 6.50 Crores as compromise and in lieu of that compromise paid Rs. 10 lacs, however, the said amount of Rs. 10 Lacs was refunded by the Financial Creditor. The said letter dated 01.06.2022, shows the admission of debt on the part of the Corporate Debtor. Furthermore, the E-mail communication dated 30.07.2022, sent by the Corporate Debtor to the Financial Creditor requested to proceed with PRIRP based resolution instead of taking recourse before this Adjudicating authority, also shows the admission of debt on the part of the Corporate Debtor, Additionally, the Financial Statements of the Corporate Debtor for the Financial year 2018-19 to 2020- Company Appeal (AT)(Insolvency) No. 1076 of 2023 Page 2 of 3 21, also shows admission of liability towards the Financial Creditor. Furthermore, as per the record of default as maintained by the Information Utility NeSL, it is concluded that there exists a debt worth more than Rs. 1 Crore by the Corporate Debtor towards the Financial Creditor and the said Corporate Debtor has defaulted in the repayment of the said debt. Therefore, another major essential ingredient of Section 7 i.e., "default" with respect to the debt stand substantiated."
..
4. We are of view that in view of OTS dated 12.10.2018 and 01.06.2022,
admittedly offered by the Appellant as well as the acknowledgment in the
financial statement for the 2018-19 and 2020-2021, the application cannot be
said to be barred by time on 29.07.2022.
5. As far as debt and default is concerned, it is an admitted fact and the
finding has been recorded by the Adjudicating Authority, the debt is worth Rs.
29,47,44,198.97 as in the financial statement for the 2018-19 and 2020-2021.
We thus, do not find any error in the impugned order passed by Adjudicating
Authority in admitting Section 7 application.
Appeal is dismissed.
[Justice Ashok Bhushan] Chairperson
(Mr. Arun Baroka) Member(Technical) akc/Nn
Company Appeal (AT)(Insolvency) No. 1076 of 2023 Page 3 of 3
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