NDLI: Kotak Mahindra Bank Limited Vs. Kew Precision Parts Private Limited & Ors.

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	2016 – ss. 7 8 238A 9 Insolvency and Bankruptcy Code 14
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
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Allowed
Headnote	Insolvency and Bankruptcy Code, 2016 – ss. 7, 8, 9, 14, 238A – The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 – s. 13 (2) – Limitation Act 1963 – Schedule – Art.137 and ss. 5, 18 – Appellant sanctioned loan/credit facilities to Respondent and necessary documents were executed between them on 29.11.2012 – Between 23.11.2012 and 31.12.2013, loan amounts were disbursed – Respondent mortgaged its assets in favour of the Appellant by memorandum dated 13.12.2013 – Respondent defaulted in repaying the dues, hence declared NPA by the Appellant on 30.09.2015 – On 19.11.2017, Appellant issued statutory notice u/s. 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 – Respondent admitted its liability to the Appellant and offered a one-time settlement at two instances – On 20.12.2018 settlement was signed and executed – Respondent defaulted in repayment of settled amount – On 2.01.2019, Appellant filed an application u/s. 7 of the IBC for initiating Corporate Insolvency Resolution Process (CIRP) before NCLT – Admitting the application, NCLT imposed a moratorium in terms of s. 14 of the Insolvency and Bankruptcy Code (IBC) – The suspended Directors of the Respondent filed an appeal before NCLAT contending that the petition filed by the Appellant was patently barred by limitation – NCLAT allowing the appeal held that the time when debt of nonpayment of due took place and that of the date of filing application u/ s. 7 is beyond limitation – Aggrieved, the appellant filed appeal u/s. 62 of IBC, 2016 – Held: NCLAT did not consider the question of applicability of Section 5 of the Limitation Act for condonation of delay, to proceedings under Section 7 of the IBC – If no limitation period is provided anywhere else in the Schedule to the Limitation Act, Article 137 of the Schedule of the Act would be attracted which provides that the period of limitation prescribed for such an application is three years from the date of accrual of the right to apply – CIRP proceedings were closed without giving the Appellant the opportunity to explain if there was sufficient cause for the delay in approaching the NCLT – An appeal being the continuation of original proceedings, the provision of Section 7(5)(b) of the IBC of notifying the Financial Creditor before rejection of a claim, would be attracted and the Appellant might have got the opportunity to rectify the defects in its application under Section 7 by filing additional pleadings and/or documents – Hence, the impugned judgment and order of the NCLAT is set aside to the extent that the CIRP proceedings have been closed.
Judge	Hon'ble Ms. Justice Indira Banerjee
Neutral Citation	2022 INSC 800
Petitioner	Kotak Mahindra Bank Limited
Respondent	Kew Precision Parts Private Limited & Ors.
SCR	[2022] 19 S.C.R. 212
Judgement Date	2022-08-05
Case Number	2176

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