The Court affirmed that a written promise by the debtor can reset the limitation period for debt recovery, allowing timely admission of the financial creditor's application.

JUDGMENT

(29^th October, 2024)

Ashok Bhushan, J.

This Appeal by a Suspended Director of the Corporate Debtor has been filed challenging the order dated 26.07.2024 passed by the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench, Court-I, admitting Section 7 application filed by the Financial Creditor through Interim Resolution Professional (IRP) (Respondent herein)

2. Brief facts of the case necessary to be noticed for deciding the Appeal are:-

2.1. The Financial Creditor- ‘Rushabh Civil Contractors Private Limited’ disbursed an amount of Rs.3.50 Crores to the Corporate Debtor on 16.12.2016. The Corporate Debtor on amount of Rs.3.50 Crores booked interest as well as TDS in its ledger. On 27.06.2022, NCLT Mumbai Bench admitted Section 7 application against the Financial Creditor. The IRP of the Financial Creditor after looking into the books of account of the Corporate Debtor came to notice that an amount of Rs.4,85,46,862/- is due on the Corporate Debtor as on 31.03.2020. A notice dated 29.11.2022 was issued by the IRP to the Corporate Debtor demanding an amount of Rs.4,74,48,109/- within seven days. The notice sent by the Financial Creditor was not replied. A CP(IB) No.244 of 2023 was filed by the Financial Creditor through IRP claiming the total outstanding amount of Rs.9,56,83,836/-, as on 31.03.2022, date of default mentioned in Part-IV of Section 7 application was 07.12.2022. The Corporate Debtor filed a reply in Section 7 application that the Petitioner (Financial Creditor) has failed to prove that there is financial debt present in the case. It was further pleaded that the loan was disbursed on 16.12.2016 and the application filed by the financial creditor is time barred. In the reply, the Corporate Debtor has relied on the letter dated 20.08.2020 issued by the Corporate Debtor where it was claimed that the parties agreed that the amount be repaid on or before 01.12.2020, failing which, two units developed by the Director of the Corporate Debtor shall be allotted to the financial creditor. It was pleaded that the default has been occurred on 01.12.2020, application is not maintainable in view of Section 10A of the IBC Code. The Adjudicating Authority passed an order on 23.11.2023 asking Financial Creditor to confront the Exhibit-B (Letter dated 20.08.2020) of the reply of the Corporate Debtor with the Suspended Board and to find out from the Suspended Board, when the loan was due for payment. Corporate Debtor also filed compilation of documents which included the ledger of the Corporate Debtor from 01.04.2016 to 15.12.2023 reflecting an amount of Rs.4,78,69,260/- due to the Financial Creditor. Corporate Debtor also filed its balance sheets.

2.2 Adjudicating Authority after hearing the parties by impugned order has admitted Section 7 application. Adjudicating Authority held that the loan was disbursed to the Corporate Debtor to be repayable with interest on demand. IRP issued demand notice dated 29.11.2022 which was to be paid within seven days. Amount having not paid, the date of default was 07.12.2022. It was further held that the letter dated 20.08.2020 is acknowledgment by the Corporate Debtor. It was held that the IRP was duty bound to take steps to protect the Corporate Debtor and recover the dues. Reliance was placed on Section 18 of the Limitation Act, 1963 . The Adjudicating Authority held that the financial debt was proved. It was held that there is requisite authorisation for filing a petition. Adjudicating Authority by the impugned order admitted Section 7 application aggrieved by which order, this Appeal has been filed.

3. We have heard Shri Kunal Tandon, Learned Counsel for the Appellant, Shri Rohan Taneja, L