NATIONAL COMPANY LAW APPEALLATE TRIBUNAL, NEW DELHI

Company Appeal (AT) (Insolvency) No. 225 of 2020

(Arising out of Order dated 3^rd January, 2020 passed by the

Adjudicating Authority (National Company Law Tribunal), Indore Bench

at Ahmedabad in C.P. (IB) No.421/7/NCLT/AHM/2018)

IN THE MATTER OF:

Rajendra Kumar Tekriwal

(Ex- Director: Pithampur Poly Products Limited)

115, Sector III, Industrial Area,

Pithampur, District- Dhar (M.P.)

….Appellant

Versus

Bank of Baroda

(Before merger with Respondent Bank

was known as “Dena Bank”)

Navlakha Chouraha

A.B. Road

Indore- 452001

…..Respondent

Present:

For Appellant:

Mr. Manoj Munshi, Mr. Ajay K. Jain and Mr.

Atanu Mukherjee, Advocates.

For Respondent:

Mr. Amit Mahaliyan, Advocate.

J U D G M E N T

BANSI LAL BHAT, J.

Through the medium of instant appeal filed under Section 61 of

the Insolvency and Bankruptcy Code, 2016 (“I&B Code” for short), Shri

Rajendra Kumar Tekriwal, Ex-Director of ‘Pithampur Poly Products

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Company Appeal (AT) (Insolvency) No. 225 of 2020

Limited’- (‘Corporate Debtor’) assails the impugned order dated 3^rd

January, 2020 passed by the Adjudicating Authority (National Company

Law Tribunal), Indore Bench at Ahmedabad in C.P. (IB) No.

421/7/NCLT/AHM/2018 by virtue whereof application filed by ‘Dena

Bank’ (before merger with ‘Bank of Baroda’)- (‘Financial Creditor’) under

Section 7 of the ‘I&B Code’ came to be admitted with consequential

orders in the nature of slapping of Moratorium on the assets of the

‘Corporate Debtor’ and appointment of ‘Interim Resolution Professional’.

The challenge to impugned order is limited to issue of limitation, it

being raised as a ground in appeal that the financial debt in respect

whereof the ‘Financial Creditor’ sought triggering of ‘Corporate

Insolvency Resolution Process’ was not payable in law, same being

barred by limitation.

2.

Learned counsel for the Appellant submitted that in the instant

case the admitted date of the default of the financial debt is 1^st May,

2000 which is the date on which such debt was declared as NPA and in

view of the same, such debt could be claimed by the ‘Financial Creditor’

within three years from such date. It is further submitted that any

subsequent acknowledgment would not change the date of default

which remains static. It is further submitted that the ‘Corporate

Insolvency Resolution Process not being a recovery proceeding,

triggering thereof is permissible within the limitation commencing from

the date of default and not the date of acknowledgment of liability. The

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Company Appeal (AT) (Insolvency) No. 225 of 2020

argument is further elaborated by canvassing that the ‘Financial

Creditor’ gets the right to file an application when a default has

occurred and such default surfaces when the ‘Corporate Debtor’ has

defaulted in repayment of liability and the ‘Financial Creditor’ has

classified the account as NPA. It is submitted that the acknowledgment

signed by the borrower may be considered for the purpose of admission

of liability but it cannot change the date of NPA based on date of default

which has already occurred upon happening of an event of non-

payment of liability. It is contended that even the acknowledgment

would not extend the date of default and the triggering of the ‘Corporate

Insolvency Resolution Process’ in the instant case being beyond three

years from the date of classification of debt as NPA, the impugned order

cannot sustain.

3.

Per contra, it is submitted on behalf of the ‘Financial Creditor’

that the ‘Corporate Insolvency Resolution Process’ can commence when

a default takes place which occurs when a debt becomes due and is not

paid. It is submitted that in the instant case the debt never got out of

limitation as there is no break in the continuation of the limitation

period. It is submitted that the Corporate Debtor’s account was

cl