The main legal point established in the judgment is the interpretation of the limitation period for filing an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, and the applicability of the Limitation Act, 1963 to the proceedings under the IBC.

ORDER :

1. The order of admission of their petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (for short “IBC”) passed by the National Company Law Tribunal (for short “NCLT”), having been reversed by the National Company Law Appellate Tribunal (for short “NCLAT”) on the ground that the application was barred by limitation, the Financial Creditor-Punjab National Bank has come up with the above appeal.

2. We have heard Shri Dhruv Mehta, learned senior counsel appearing for the appellant and Shri Rahul Totala, learned counsel appearing for the respondents.

3. The appellant herein filed a petition under Section 7 IBC against M/s Jailaxmi Sugar Products Pvt. Limited, the Corporate Debtor, who is the second respondent herein claiming, inter alia, (i) that vide sanction letters dated 07.05.2010 and 28.09.2010, a term loan was sanctioned to the second respondent herein; (ii) that by a letter dated 17.09.2011, restructuring of the existing term loans and fresh sanction of term loan was granted to the Corporate Debtor; (iii) that the Corporate Debtor defaulted in repayment and became a NPA on 31.03.2013; (iv) that the appellant issued a demand notice dated 30.04.2013 under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; (v) that the Corporate Debtor also executed Balance and Security Confirmation letters dated 03.07.2014 and 17.06.2017; (vi) that the appellant, along with the Union Bank of India also filed an application in O.A. No.185 of 2014 on the file of the DRT, Pune for the issue of a certificate of recovery; (vii) that the original application was allowed by DRT, Pune by an order dated 01.11.2016, directing the Corporate Debtor and others including respondent No.1 herein to jointly and severally pay to the appellant herein, a sum of around Rs.45 cores together with interest @16.25% per annum (apart from the amount payable to Union Bank of India); (viii) that the total amount outstanding from the Corporate Debtor as on 13.08.2019 was Rs.108,34,33,364.19; and (ix) that in a parallel proceeding, the High Court of Judicature at Bombay had passed an order dated 04.01.2018 directing the winding up of the Corporate Debtor.

4. By an order dated 06.11.2019, NCLT admitted the petition of the appellant herein, filed under Section 7 IBC. Challenging the order of admission, the first respondent herein, who claims to be a 50% shareholder, promoter, director and creditor of the Corporate-Debtor filed an appeal before NCLAT. By the order dated 02.03.2021 impugned in this appeal, the NCLAT set aside the order of the NCLT on the ground that the claim of the appellant-Financial Creditor was barred by limitation. Aggrieved by the said order, the Financial Creditor is on appeal before us.

5. Before the NCLAT, the first respondent raised a preliminary objection that in the light of the order of winding up passed by the High Court of Judicature at Bombay, an application under Section 7 IBC was not maintainable. But the said contention raised by the first respondent was rejected by NCLAT on the basis of the decision of this Court in Jaipur Metals and Electricals Employees Organization vs. Jaipur Metals and Electricals Ltd. & Ors., (2019) 4 SCC 227.

6. After overruling the objection relating to maintainability raised on the basis of the order of winding up, NCLAT took up for consideration the question of limitation. NCLAT opined that the decision of this Court in Babulal Vardharji Gurjar vs. Veer Gurjar Aluminium Industries Pvt. Ltd. & Anr., (2020) 15 SCC 1, clinched the issue on the question of limitation and that the application under Section 7, filed on 10.10.2019 was beyond a period of three years from the date of default (NPA) namely 31.03.2013. The Balance and Security Confirmation Letter dated 17.06.2017 was held by NCLAT to have been given after the expiry of three years from the date of default and as a consequence, Section 18 of the Limitation Act was also he