Shrenik Ashokbhai Morakhia vs Reliance Asset Reconstruction Company Ltd.
Company Appeal (AT) (Insolvency) No. 719 of 2024
Facts:
1. Dena Bank has issued a Sanction Letter dated 18.06.2012 to the Corporate Debtor – M/s Morakhia Metals and Alloy Pvt. Ltd. The Corporate Debtor was granted credit facility to the extent of Rs.32.15 Crore. The Appellant along with one Mr. Pankaj Kumar Morakhia executed a Joint Deed of Guarantee dated 25.07.2012 in favour of the Dena Bank in order to secure the loan facility. On 31.05.2015, the account of the Corporate Debtor was declared NPA
2. On 04.03.2016, the Bank invoked Personal Guarantee dated 25.07.2012 and demanded the repayment of a sum of Rs.26.68 crore from the Appellant within 15 days. (v) On 29.01.2018, Appellant issued a Declaration-cumUndertaking in favour of Dena Bank. Dena Bank assigned the loan facility in favour of Respondent No.1 – Reliance Asset Reconstruction Company Ltd.
3. The Adjudicating Authority initiated CIRP against the Corporate Debtor by order dated 19.02.2020, in which proceeding Resolution Plan was also approved. The Financial Creditor issued Demand Notice dated 12.07.2021 claiming an amount of Rs.27,81,33,386 and thereafter on 10.08.2021, Section 95 application was filed by the Financial Creditor. The Adjudicating Authority heard both the parties and vide order dated 20.03.2024 passed an order of admission under Section 100 of the Code. Aggrieved by which order this Appeal has been filed.
Issue: Whether the order passed is correct ?
Arguments:
Appellant:
1. Counsel submitted that date of default having occurred on 04.03.2016, the application under Section 95 having been filed on 10.08.2021 is beyond the period of three years and barred by time. The three years’ period stood expired on 04.03.2019 and thereafter no application under Section 95 could have been filed by the Bank.
Respondent:
1. Counsel submitted that Recall Notice was issued on 04.03.2016 and on 29.01.2018 Appellant issued a Declaration cum Undertaking which is clear acknowledgement of debt, hence, there will be further extension of limitation from 29.01.2018 and petition filed on 10.08.2021 could not be held to be barred by time.
Decision: NCLAT dismissed the appeal.
Rationale:
1. NCLAT noted that, it is clear that said declaration contained the acknowledgement of debt of the company towards the Financial Creditor. The acknowledgment of debt in writing is sufficient to extend the period of limitation as per Section 18 of the Limitation Act.
Order:
