Thomas George vs. Union Bank Of India & Anr - (NATIONAL COMPANY LAW APPELLATE TRIBUNAL) (05 Apr 2021)

Provisions of Limitation Act would apply mutatis mutandis to proceedings under IBC in NCLT/NCLAT

MANU/NL/0132/2021

Insolvency

Present Appeal has been filed by the Appellant-Mr. Thomas George who is director of the suspended Board of the Corporate Debtor Mathstraman Manufacturers and Traders Pvt. Ltd. against the Impugned Order passed by the Adjudicating Authority, National Company Law Tribunal. The Application under Section 7 of Insolvency and Bankruptcy Code, 2016 (IBC) was filed by the Union Bank of India, (Erstwhile Corporation Bank which merged with it) against the Corporate Debtor.

In present Appeal, the Appellant claims that, the debt due and claimed before the Adjudicating Authority by the Bank was time-barred and thus, the Application should not have been admitted.

In Judgment in the matter of "Sesh Nath Singh & Anr. Vs. Baidyabati Sheoraphuli Co-Operative Bank Ltd And Anr.", the Supreme Court has observed that, under Section 18 of the Limitation Act, 1963,an acknowledgement of present subsisting liability, made in Company Appeal in writing in respect of any right claimed by the opposite party and signed by the party against whom the right is claimed, has the effect of commencing of a fresh period of limitation, from the date on which the acknowledgment is signed. However, the acknowledgment must be made before the period of limitation expires.

Further, as per the observation in said judgment, Section 238A of the IBC makes the provisions of the Limitation Act, as far as may be, applicable to proceedings before the NCLT and the NCLAT. The IBC does not exclude the application of Section 6 or 14 or 18 or any other provision of the Limitation Act to proceedings under the IBC in the NCLT/NCLAT. All the provisions of the Limitation Act are applicable to proceedings in the NCLT/NCLAT, to the extent feasible. The provisions of the Limitation Act would apply mutatis mutandis to proceedings under the IBC in the NCLT/NCLAT.

The documents on record referred by Learned Counsel for Bank show series of Acknowledgments of debts by Corporate Debtor since date of NPA which extend period of limitation if Section 18 of Limitation Act is considered. In view of Judgment of the Hon'ble Supreme Court, OTS Proposals and Settlement requests and balance sheet referred, present Tribunal do not find that the Application under Section 7 of IBC could be said to be barred by Limitation. There is no substance in the Appeal. The Appeal is dismissed.

Tags : LIMITATION ACT PROVISIONS APPLICABILITY