1. Application under Section 7, Insolvency and Bankruptcy Code — Dismissal on limitation grounds — Reversal by appellate tribunal based on evidence not produced before the adjudicating authority. (Para 4 , 6 )
Back
Next 
2025 Supreme(SC) 182
SUPREME COURT OF INDIA
ABHAY S.OKA, UJJAL BHUYAN, JJ.
Xenitis Infotech Ltd. – Appellant
Vs.
UCO Bank - Respondent
Civil Appeal No.9325 Of 2022
Decided on : 07-01-2025.
Important Points
The court clarified that the issue of limitation regarding the application under the Insolvency and Bankruptcy Code remains open for consideration by the NCLT, allowing the respondent to produce additional evidence.
Subject
Insolvency Law - Appeals
Act Referred
Headnote
(A) Insolvency and Bankruptcy Code, 2016 - Section 7 - Indian Contract Act, 1872 - Appeal against dismissal of application under Section 7 of the IB Code on grounds of limitation - NCLAT held application was within limitation based on a letter dated 25th October, 2019 - Letter not produced before NCLT, thus appellant could not address it - Order of remand modified to allow production of the letter before NCLT, with the issue of limitation remaining open for consideration. (Paras 4-10)
Facts of the case:
The respondent-Bank's application under Section 7 of the IB Code was dismissed by NCLT due to limitation. NCLAT reversed this decision, relying on a letter not previously submitted to NCLT.
Findings of Court:
The court modified the remand order, allowing the respondent to produce the letter before NCLT while keeping the limitation issue open for consideration.
Issues: The main issue was whether the application under the IB Code was barred by limitation based on the letter dated 25th October, 2019.
Ratio Decidendi: The court ruled that since the letter was not presented to NCLT, the appellant could not address it, necessitating modification of the remand order to allow its introduction.
Result: Appeal partly allowed.
Facts of the case:
The respondent-Bank's application under Section 7 of the IB Code was dismissed by NCLT due to limitation. NCLAT reversed this decision, relying on a letter not previously submitted to NCLT.
Findings of Court:
The court modified the remand order, allowing the respondent to produce the letter before NCLT while keeping the limitation issue open for consideration.
Issues: The main issue was whether the application under the IB Code was barred by limitation based on the letter dated 25th October, 2019.
Ratio Decidendi: The court ruled that since the letter was not presented to NCLT, the appellant could not address it, necessitating modification of the remand order to allow its introduction.
Result: Appeal partly allowed.
Legal Category Hierarchy
Advocates:
Advocate Appeared:
For the Appellant : Mr. Bharat Sood, Adv., Mr. Sanath Kumar Das, Adv., Mr. P. S. Sudheer, AOR, Mr. Rishi Maheshwari, Adv., Ms. Anne Mathew, Adv., Mr. Jai Govind M J, Adv.
For the Respondent: Ms. Swati Dalmia, Adv., Mr. Orijit Chatterjee,Adv., Mr. Saurabh Bindal, Adv., Mr. Shouryabrata Mandal, AOR
Advocate Appeared:
For the Appellant : Mr. Bharat Sood, Adv., Mr. Sanath Kumar Das, Adv., Mr. P. S. Sudheer, AOR, Mr. Rishi Maheshwari, Adv., Ms. Anne Mathew, Adv., Mr. Jai Govind M J, Adv.
For the Respondent: Ms. Swati Dalmia, Adv., Mr. Orijit Chatterjee,Adv., Mr. Saurabh Bindal, Adv., Mr. Shouryabrata Mandal, AOR
Table of Contents
2. Whether the appellate tribunal could conclude the issue of limitation based on evidence not presented before the adjudicating authority, depriving the opposite party of an opportunity to respond. (Para 6 , 7 )
3. Evidence produced for the first time at the appellate stage prevents the opposite party from dealing with it, necessitating a modification of the remand directions. (Para 6 , 7 )
4. Findings based on evidence not produced before the lower forum must be remanded to allow the opposite party to contest such evidence in accordance with law. (Para 7 , 8 , 9 )
5. Appeal partly allowed — Remand order modified to allow production of evidence and leave the issue of limitation open for adjudication by the adjudicating authority. (Para 8 , 9 , 10 )
6. Can an appellate tribunal decide a legal issue based on evidence not produced before the adjudicating authority?
If an appellate tribunal relies on evidence not produced before the adjudicating authority, the opposite party must be given an opportunity to deal with that evidence, requiring the matter to be remanded or the order modified to ensure a fair hearing. (Para 6 , 7 , 8 )
7. How should a remand order be modified when new evidence is introduced at the appellate stage?
The remand order should be modified to explicitly allow the production of the new evidence before the adjudicating authority and keep the contested legal issue open for fresh consideration in accordance with law. (Para 8 , 9 )
8. What is the relevance of Section 25(3) of the Indian Contract Act in determining limitation for IB Code applications?
Section 25(3) of the Indian Contract Act, 1872, relating to a promise to pay, can be used to establish that an application under the IB Code was filed within the period of limitation. (Para 5 )
ORDER :
1. By consent of the parties, the appeal is taken up for final hearing.
2. Heard the learned counsel appearing for the parties.
3. A brief reference to the facts of the case will be necessary.
4. By order dated 19th March, 2020, an application filed by the respondent-Bank under Section 7 of the Insolvency and Bankruptcy Code, 2016 (for short, "the IB Code") against the appellant was dismissed by the National Company Law Tribunal (for short, "the NCLT") on the ground of bar of limitation. In an appeal preferred by the respondent, by the impugned judgment, the National Company Law Appellate Tribunal (for short, "the NCLAT") has interfered and has held that the application was within the limitation and directed the adjudicating authority to consider the application afresh by treating it as filed within the period of limitation and decide the same in accordance with law.
5. After hearing the learned counsel appearing for the parties, we find that the NCLAT has relied upon a letter dated 25th October, 2019 for coming to the conclusion that Section 25(3) of the Indian Contract Act, 1872 will apply and in view of the promise contained in the same letter, the petition under Section 7 of the IB Code was within the limitation.
6. However, the admitted position is that the letter dated 25th October, 2019 was not produced by the respondent before the NCLT and it was produced for the first time in the appeal preferred by the respondent before the NCLAT. The finding on the issue of bar of limitation has been upset by the NCLAT mainly relying upon the letter dated 25th October, 2019.
7. As the said letter was not produced by the respondent before the NCLT, the present appellant could not deal with the said letter before the NCLT. Therefore, the direction of remand issued in paragraph 11 of the impugned judgment needs modification.
8. Accordingly, we modify the order of remand contained in paragraph 11 of the impugned judgment by clarifying that it will be open for the respondent to produce the letter dated 25th October, 2019 before the NCLT.
9. We also clarify that the issue of limitation which was concluded by the NCLAT under the impugned judgment will remain open to be considered by the NCLT in accordance with law.
10. Subject to the above modification, the appeal is partly allowed by leaving open all questions for consideration of the NCLT.
