Entries in a corporate guarantor's balance sheet acknowledging a contingent liability constitute an acknowledgement under Section 18 of the Limitation Act, extending the limitation period for initiating CIRP under Section 7 of the IBC, and pre-existing disputes are irrelevant for a financial creditor's application.

ORDER

PER: Bidisha Banerjee, Member (Judicial):

1. This Court congregated through hybrid mode.

2. Heard the Learned Counsels for both parties.

3. This instant application is filed under Section 7 of the Insolvency and Bankruptcy Code, for brevity I&B Code, read with Rule 4 of the Insolvency and Bankruptcy (Application to the Adjudicating Authority) Rules, 2016, by “Central Bank of India”, hereinafter referred to as “Financial Creditor” (“Applicant”/ “FC”) against “M/s Jainco Automotive Pvt Ltd”, hereinafter referred to as “Corporate Debtor” (“Respondent”/ “CD”) seeking direction to initiate Corporate Insolvency Resolution Process (for brevity “CIRP”) in respect of the Corporate Debtor.

4. As of 3rd January, 2024, the total outstanding balance stands at Rs. 43,47,83,415.00/-. This balance is calculated based on a loan amount due and recoverable from Eastern Gases Limited as of 21st August 2018, amounting to Rs. 23,15,37,663.00/-, which was accepted as a claim in liquidation. From this amount, Rs. 10,20,37,136.00/- has been received in liquidation vide Order dated 21.08.2018. Additionally, further interest has accrued from 22nd August 2018 to 20th February 2024, totalling Rs. 30,52,82,888.00/-. This brings the overall outstanding balance to Rs. 43,47,83,415.00/-. 5. Factual Matrix:

5.1. Financial Creditor had sanctioned working capital credit limits to the tune of Rs. 20 crores (Fund Based Working Capital facilities of 12 Crores and Non-Fund based limit of 8 crores) in favour of the Principal Borrower under Consortium Agreement dated 16/11/2012.

5.2. The said amount was secured by the guarantees of Jainco Automotive Pvt. Ltd. and Vivek Brothers Pvt. Ltd.

5.3. Two Deeds of Guarantee were executed by the Corporate Debtor (Corporate Guarantor), one on 05/02/2013 for an amount of Rs. 43 crores and another Deed of Guarantee on 21/01/2016 for an amount of Rs. 47 Crores.

5.4. The Corporate Debtor via Form 8 created charge on 17th September 2012 by way of mortgage by depositing title deeds of 9 residential flats owned by it in Mouza Raghunathpur, PS Rajarhat, District – 24 Parganas (North) on pari passu basis in favour of the CBI consortium upto a liability of the borrower fixed at 43 crores and registered as such with the Registrar of companies.

5.5. Further, a Joint letter was also issued by Corporate Debtor (Corporate Guarantor) along with Vivek Brothers Pvt. Ltd. to the Financial Creditor for creation of mortgage in respect of 22 flats situated at Mahaveer Apartment at Mouza Raghunathpur, J.L. No. 8 R.S. No 134 comprised in R.S. Plot No. 580 under L.R. Khaitan Nos. 943/1 and 428/2 under holding Nos. RGM/21/2987 & 21/2088, North 24 Paraganas.

5.6. The account of Principal Borrower became NPA on 2nd May 2017 and is continuing as a NPA account. By an order dated 8th November 2017 delivered in CP (IB) No.482/KB/2017, CIRP was initiated against the Principal Borrower and thereafter, pursuant to an order dated 21^st August 2018 passed in IA 718/KB/2018 under the same case number, the Principal Borrower went under liquidation. In the liquidation, the financial creditor being one of the members of COC received a sum of Rs 10,20,37,136.00/-, thereby leaving a sum of Rs. 43,47,83,415.00/- due and payable to the Financial Creditor.

5.7. In the above background, this Company Petition has been filed by the Financial Creditor for initiation of CIRP proceeding against the Corporate Debtor.

6. Submissions of the Applicant:

6.1. It is submitted that on 16th November 2012, Ms/Eastern Gases Limited had approached the Financial Creditor for sanction of cre