IMPORTANT POINT
Initiation of Corporate Insolvency Resolution Process - Balance sheet acknowledging debt is also a document relevant for calculating limitation.

JUDGMENT :

Vikram Nath, J.

This appeal, under Section 62 of the Insolvency and Bankruptcy Code, 2016,¹[In short, “IBC”] has been filed assailing the correctness of judgment and order of National Company Law Appellate Tribunal,²[NCLAT] dated 04.01.2022, whereby the Company Appeal (AT) (Insolvency) No.930 of 2021 filed by the appellant was dismissed upholding the judgment and order dated 22.09.2021, passed by the Adjudicating Authority, admitting the application under Section 7 of the IBC after condoning the delay.

2. Relevant facts giving rise to the present appeal are briefly summarized as under :

2.1. The appellant entered into a leave and license agreement with Universal Premises and Textiles Private Limited,³[The Universal Premises] for the premises being Ground to 10th floor in the building named Solaris “C”. A security deposit of Rs.87,56,24,381/- was furnished by the appellant between the period 23.06.2007 to 03.11.2008. Universal Premises executed a simple mortgage without possession in favour of the appellant for seven floors on 06.11.2008.

2.2. On 02.05.2011, Universal Premises executed a sale deed in favour of Rajput Retail Ltd.,⁴[RRL]. The sale deed was for the land admeasuring 5123.90 sq. meters which included the land beneath the aforesaid building - Solaris “C” also. The Leave and License Agreements in favour of the appellant were duly acknowledged, reserved, and protected under the sale deed.

2.3. RRL, having availed credit facilities from the State Bank of India,⁵[In short, “State Bank of India”] (Respondent No.2), created an equitable mortgage on 29.06.2011 with respect to the land underneath the building-Solaris “C” to secure the said credit facilities.

2.4. In 2012, Universal Premises was merged with RRL under the orders of the High Court of Bombay and it was renamed as Shreem Corporation Limited,⁶[In short, “SCL”], which is the Corporate Debtor. Between June, 2012 and 17.10.2013, the appellant issued notices for the refund of Security Deposit under the Leave and License agreement. However, as the said amount was never paid, the appellant filed eight summary suits before the Bombay High Court for refund of the Security Deposit, along with interest, during the period from 14.12.2012 to 24.12.2013.

2.5. In the meantime, Respondent No.2 declared the Corporate Debtor as Non-Performing Asset,⁷[In short, “NPA”] in view of the default as on 31.03.2013, vide communication dated 28.06.2013.

2.6. The High Court of Bombay on 27.07.2015 passed a common conditional order in all the Summary Suits granting leave to defend to the Corporate Debtor subject to deposit of the Security Deposit. Later, the suits were decreed on 02.12.2015 and 15.12.2015.

2.7. According to the appellant, the Corporate Debtor was shown as an inactive Company since 2016 and the date of last Annual General Meeting,⁸[AGM] was shown to be 26.09.2016.

2.8. The appellant had applied before the High Court of Bombay for recovery of its dues in which objections were filed by respondent No.2. However, the same were rejected on 18.03.2019 and a proclamation of sale was ordered in favour of the appellant.

2.9. In the meantime, the respondent No.2 moved separate applications at different times for lifting of attachment from ground floor and 2nd to 5th floors in Solaris “C”, which was withdrawn in October 2016.

2.10. On 08.11.2019, respondent No.2 filed fresh interim applications again seeking lifting of attachment orders on the 11 floors of Solaris “C” and also for stay of the sale process for the seven floors.

2.11. Respondent No.2 filed a Company Petition No.1382/MB/2021 under Section 7 IBC against the Corporate Debtor on 22.01.2020 without intimating or making the appellant a party to the said proceedings. Application under Section 5 of the Limitation Act was also filed along with the petition for condoning delay of 1392 days. Later on, respondent No.2 filed an additional affidavit stating that the delay was only of 662 days in view of the acknowledgement in the Balance