Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | 2016 – ss. 7(2) insolvency and Bankruptcy Code 1963 – s. 18 – 62 & 238A – Limitation Act |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case(s) Referred | Referred Case 0 Referred Case 1 Referred Case 2 Referred Case 3 Referred Case 4 Referred Case 5 Referred Case 6 Referred Case 7 Referred Case 8 Referred Case 9 |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Allowed |
Headnote | Insolvency and Bankruptcy Code, 2016 – ss. 7(2), 62 & 238A – Limitation Act, 1963 – s. 18 – Corporate Insolvency Resolution Process (CIRP) – Extension of period of limitation – Acknowledgement in books of account – A loan agreement was executed between the consortium of banks and the corporate debtor – Pursuant to which, a loan amount of Rs.129 crore was sanctioned to corporate debtor – Corporate debtor was classified as nonperforming asset (NPA) – Thereafter, parties entered into a settlement agreement – There were extensions of time and revised settlements – Ultimately, the appellant revoked the settlement – Corporate debtor acknowledged its liabilities towards the appellant in its financial statement from 2008-09 to 2016-17 – Application was filed by the appellant u/s 7(2) of IBC before the NCLT for initiation of CIRP against the corporate debtor – Corporate debtor filed a application seeking dismissal of application u/s 7(2) as time barred – NCLT dismissed the application of corporate debtor and admitted the application for initiation of CIRP – NCLAT held that CIRP was barred by limitation and the books of account cannot be treated as an acknowledgement of liability in respect of debt – On appeal, held: IBC has overriding effect over other laws – There is no specific period of limitation prescribed in the Limitation Act, 1963, for an application under the IBC – Therefore, it is to be governed by the Article 137 of 1963 Act which prescribes period of limitation as 3 years – It is well settled that entries in books of accounts and/or balance sheets of a corporate debtor would amount to an acknowledgment u/s. 18 of the Limitation Act – Hence, an application u/s. 7 of the IBC would not be barred by limitation, if there were an acknowledgement of the debt by the corporate debtor before expiry of the period of limitation of 3 years – NCLAT erred in law in holding that the books of account of a company could not be treated as acknowledgement – In the present case, corporate debtor acknowledge its liability in its financial statement from 2008-09 to 2016-17 and the application u/s. 7(2) was filed on 03.04.2018 – Hence, the application was well within the extended period of limitation – Impugned Judgment and order of NCLAT set aside. |
Judge | Hon'ble Ms. Justice Indira Banerjee |
Neutral Citation | 2022 INSC 777 |
Petitioner | Asset Reconstruction Company (india) Limited |
Respondent | Tulip Star Hotels Limited & Ors. |
SCR | [2022] 5 S.C.R. 1112 |
Judgement Date | 2022-08-01 |
Case Number | 84 |
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