JUDGEMENT

Per; Shreesha Merla, Member (T) 1. Dissatisfied with the impugned order dated 06.07.2020 passed by the Adjudicating Authority, National Company Law Tribunal, Mumbai Bench IV, Mumbai in CP (IB) No.3402/MB.IV/2019 dismissing the Application filed under Section 7 of the Insolvency & Bankruptcy Code, 2016 (hereinafter referred to as the ‘I&B Code’), M/s UCO Bank/Financial Creditor has preferred this Appeal under Section 61 of the I&B Code.

2. Succinctly put, the facts in brief are that vide Sanction Letter dated 03.05.2005, M/s UCO Bank/Appellant herein approved a Cash Credit of Rs.10.35 crores, warehouse funding of Rs.12.50 crores and Bank Guarantee of Rs.0.80 Crore in favour of M/s Deegee Orchards Pvt Ltd, Corporate Debtor. On 04.10.2006, the Appellant renewed the sanction of a total of Rs.20.35 crores. On 07.03.2008, 05.11.2008, 25.11.2011 and 23.12.2011 the Appellant remodified the terms of sanction and renewed the Credit Facilities extended to the Corporate Debtor. The agreed rate of interest was 11.70% per annum. On 30.06.2014, it is averred that a sum of Rs. 43,04,08,269.00 was due and payable and the account of the Corporate Debtor was declared as NPA. By the impugned order, the Adjudicating Authority, while dismissing the ‘Application’ has observed as follows:-

“22. In sum – (a) The date of default is 30.06.2014. (b) The balance confirmation letter placed on record is dated 30.06.2013/ (c) The letter informing the Corporate Debtor about the accounts having become NPA is dated 13.11.2014. (d) There is nothing on record to show that there is any acknowledgement of debt after the accounts were declared as NPA on 13.11.2014. (e) The OTS proposal is dated 01.08.2018 i.e. long after the expiry of the prescribed period of limitation.

Supreme Court in BK Educational Services (supra), Gaurav Hargovindbhai Dave (supra), Jignesh Shah (supra), Vashdeo R Bhojwani (supra), Sagar Sharma (supra) and Sampuran Singh (supra), and those of the Hon’ble NCLAT in Ishrat Ali (supra), Munish Kumar Bhunsali (supra) and V Hotels Limited (supra) and the fact that the judgement in Sesh Nath (supra) no longer represents the correct law, we hold that the present petition filed by UCO Bank against Deegee Orchards Private Ltd is barred by limitation.

petition fails and the same is rejected.” 3. Submissions of the Learned Counsel for the Appellant  The Learned Counsel for the Appellant submitted that the account of the Corporate Debtor was declared NPA on 03.09.2014 and the Appellant Bank issued ‘Statutory Notice’ under Section 13(2) Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (SARFAESI Act) demanding an amount of Rs.43,19,95,384.43 (Rupees Forty Three Crore Nineteen Lakh Ninety Five Thousand Three Hundred and Eighty Four and Paise Forty three only) within 60 days from the date of issue of the Notice. Proceedings against the Respondent/Corporate Debtor were initiated before the Debt Recovery Tribunal, Nagpur Bench vide OA/158/2015 for recovery of the dues.

 The Respondent also filed SA/88/15, challenging the steps taken by the Appellant under the SARFAESI Act, 2002.

 The Learned Counsel for the Appellant contended that the Respondent/Corporate Debtor has acknowledged its liability in the Balance Sheet for the Year Ending 31.03.2017 and also in the OTS letters dated 06.06.2018, 01.08.2018, 20.11.2018, 29.12.2018, 21.01.2019, 28.01.2019 and 22.08.2019. Hence the period of limitation is extended by virtue of ‘admission of liability’ made by the Corporate Debtor in its Balance Sheet for the Financial Year ending 31.03.2017. The Adjudicating Authority has not taken into consideration the cognizance of these OTS letters and rejected the same on the ground that these admissions were made beyond the applicability of the period of limitation.

 By a letter dated 20.11.2018, the Corporate Debtor has made a ‘Part Payment’ of Rs.25 lakhs against the OTS proposal which squarel