NDLI: Tottempudi Salalith Vs. State Bank of India & Ors.

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	2016 Insolvency and Bankruptcy Code
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
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Dismissed
Headnote	Issue for consideration:Issues arose as to whether the debts in connection with therecovery certificate issued in the year 2015, could form subjectmatter of an application u/s.7 IBC; whether the the banks havingapproached the DRT, were barred under the doctrine of electionfrom approaching the NCLT for recovery of same set of debts;and whether the date of default should go back to the date onwhich the loan account of the corporate debtor was declared asnon-performing asset.Insolvency and Bankruptcy Code, 2016 – s. 7 – Debts inconnection with the recovery certificate issued in the year 2015,if could form subject matter of an application u/s. 7 – Corporatedebtor faced insolvency proceedings due to failure to repayloans to several banks – Issuance of recovery certificate bythe tribunal in the year 2015 and 2017 respectively, againstthe corporate debtor in which the financial creditor-Bankshad stake – On basis thereof, financial creditor initiatedproceedings u/s. 7 seeking Corporate Insolvency ResolutionProcess-CIRP against the corporate debtor in the year 2019– Tribunal admitted the application and declared moratoriumon the ground of limitation – Appeal thereagainst, on theground that the application u/s. 7 was not maintainable onthe ground of limitation and doctrine of election – Dismissedby the appellate tribunal – Correctness:Held: Doctrine of election cannot be applied to prevent the financialcreditors from approaching the NCLT for initiation of CIRP – Dateof recovery certificate was treated to be the date on which the timeof limitation began to tick – Letter issued by the corporate debtorto the Banks, agreeing in principle to repay the amount due to thefinancial creditors was a request to consider a one-time settlement– In absence of averments or pleading, after initiation of insolvencyproceeding, any promise made to pay the debt cannot be treated tohave cured the fault of limitation in a pre-existing action – It cannotby itself revive the debt though it could create an independentcause of action – Proceedings initiated before the tribunal is acomposite application based on three recovery certificates, twoof which were instituted within the three year limitation period,but the third recovery certificate was issued in 2015, beyond thelimitation period – However, a recovery certificate under the 1993Act is also clothed with the character of a deemed decree whichhas twelve years for enforcement as per Art. 136 – In the eventa financial creditor wants to pursue a recovery certificate as adeemed decree, he would get twelve years’ time – Applicationwith respect to the two recovery certificates issued in 2017 ismaintainable – As regards recovery certificate of 2015, in casethe appellate tribunal is of opinion that CIRP could not lie, as thedecree would be still alive, the claim based on the said recoverycertificate could be segregated from the composite claim and theCommittee of Creditors would treat the sum reflected in the saidrecovery certificate as part of the claims made in pursuance ofthe public announcement – Limitation Act, 1963 – Art. 136 and137 – Recovery of Debts and Bankruptcy Act, 1993. [Para 7, 9,12, 13,15]Insolvency and Bankruptcy – Insolvency proceedings –Doctrine of election – Application of – Plea of corporatedebtor that the banks having approached the DRT, were barredunder the doctrine of election from approaching the NCLT forrecovery of same set of debts:Held: Doctrine of election embodied in the law of evidence, barsprosecution of the same right in two different fora based on thesame cause of action – On facts, the recovery proceedings beforethe DRT commenced in 2014, and at that point of time, the IBChad not come into existence – Recovery certificate itself would giverise to a fresh cause of action entitling a financial creditor to initiateCIRP – Such recovery certificate arose out of a proceeding fromthe DRT – Enforcement mechanism for a recovery certificate is anindependent course, which a financial creditor may opt for realisationof its dues crystalised under the 1993 Act, instead of chasing themechanism under the 1993 Act – Question of election betweenthe fora for enforcement of debt under the 1993 Act and initiationof CIRP under the IBC arises only after a recovery certificate isissued – Reliefs under the two statutes are different and once CIRP493results in declaration of moratorium, the enforcement mechanismunder the 1993 Act or the SARFAESI Act gets suspended – Insuch circumstances, after issue of recovery certificate, the financialcreditor ought to have option for enforcing recovery through anew forum instead of sticking on to the mechanism through whichrecovery certificate was issued – Thus, the doctrine of electioncannot be applied to prevent the financial creditors from approachingthe NCLT for initiation of CIRP – Doctrines. [Para 11]
Judge	Hon'ble Mr. Justice Aniruddha Bose
Neutral Citation	2023 INSC 923
Petitioner	Tottempudi Salalith
Respondent	State Bank Of India & Ors.
SCR	[2023] 14 S.C.R. 492
Judgement Date	2023-10-18
Case Number	2348

Sl.	Authority	Responsibilities	Communication Details
1	Ministry of Education (GoI), Department of Higher Education	Sanctioning Authority	https://www.education.gov.in/ict-initiatives
2	Indian Institute of Technology Kharagpur	Host Institute of the Project: The host institute of the project is responsible for providing infrastructure support and hosting the project	https://www.iitkgp.ac.in
3	National Digital Library of India Office, Indian Institute of Technology Kharagpur	The administrative and infrastructural headquarters of the project	Dr. B. Sutradhar bsutra@ndl.gov.in
4	Project PI / Joint PI	Principal Investigator and Joint Principal Investigators of the project	Dr. B. Sutradhar bsutra@ndl.gov.in Prof. Saswat Chakrabarti will be added soon
5	Website/Portal (Helpdesk)	Queries regarding NDLI and its services	support@ndl.gov.in
6	Contents and Copyright Issues	Queries related to content curation and copyright issues	content@ndl.gov.in
7	National Digital Library of India Club (NDLI Club)	Queries related to NDLI Club formation, support, user awareness program, seminar/symposium, collaboration, social media, promotion, and outreach	clubsupport@ndl.gov.in
8	Digital Preservation Centre (DPC)	Assistance with digitizing and archiving copyright-free printed books	dpc@ndl.gov.in
9	IDR Setup or Support	Queries related to establishment and support of Institutional Digital Repository (IDR) and IDR workshops	idr@ndl.gov.in

Tottempudi Salalith Vs. State Bank of India & Ors.

Please Log-in to view this content

Axis Bank Limited Vs. Naren Sheth & Anr.

Bank of Baroda & Anr Vs. Mbl Infrastructures Limited & Ors.

V Nagarajan Vs. Sks Ispat and Power Ltd.& Ors.

State Bank of India Vs. V. Ramakrishnan & Anr.

Devarajan Raman Vs. Bank of India Limited

Gujarat Urja Vikas Nigam Limited Vs. Mr. Amit Gupta & Ors.

Sesh Nath Singh & Anr. Vs. Baidyabati Sheoraphuli Co-operative Bank Ltd. and Anr.

Ajay Gupta Vs. Pramod Kumar Sharma

State Bank of India Vs. Krishidhan Seeds Private Limited

Tottempudi Salalith Vs. State Bank of India & Ors.

Tottempudi Salalith Vs. State Bank of India & Ors.

Please Log-in to view this content

Similar Documents

Axis Bank Limited Vs. Naren Sheth & Anr.

Bank of Baroda & Anr Vs. Mbl Infrastructures Limited & Ors.

V Nagarajan Vs. Sks Ispat and Power Ltd.& Ors.

State Bank of India Vs. V. Ramakrishnan & Anr.

Devarajan Raman Vs. Bank of India Limited

Gujarat Urja Vikas Nigam Limited Vs. Mr. Amit Gupta & Ors.

Sesh Nath Singh & Anr. Vs. Baidyabati Sheoraphuli Co-operative Bank Ltd. and Anr.

Ajay Gupta Vs. Pramod Kumar Sharma

State Bank of India Vs. Krishidhan Seeds Private Limited

Tottempudi Salalith Vs. State Bank of India & Ors.