IMPORTANT POINT
Time for computing limitation period for filing application under Section 7 of IBC would be guided by Article 137 of Limitation Act.

JUDGMENT :

ANIRUDDHA BOSE, J.

The appellant before us has described himself as the managing director of the Respondent No.2, Totem Infrastructures Limited (corporate debtor) against whom proceedings have been initiated on account of default in repaying financial facilities extended to them by several banks in the form of loans and bank guarantees. The total claim on account of default as made before the National Company Law Tribunal (NCLT) was for a sum of Rs.613,27,01,598.23/. Several banks had extended these facilities, being (i) Union Bank of India, (ii) IDBI, (iii) Oriental Bank of Commerce, (iv) Bank of Baroda, (v) Karnataka Bank, (vi) Syndicate Bank and (vii) Punjab National Bank as also the State Bank of India, who is the first respondent in this appeal. The State Bank of Hyderabad, State Bank of Mysore, State Bank of Travancore, State Bank of Bikaner and Jaipur and State Bank of Patiala, had also extended such facilities, but they had merged with the State Bank of India on 01.04.2017. Hence, the State Bank of India is now prosecuting the composite claims of these banks. In the proceeding before the NCLT, out of which this appeal arises, it was the State Bank of India who had filed the application as financial creditor under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC).

2. Prior to bringing the action under the IBC, notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) was issued to the corporate debtor and recovery proceedings were instituted against them before the Debt Recovery Tribunal (DRT). Three applications were filed by the exposed lending banks, two before the DRT, Hyderabad being OA No.154 of 2014 and OA No.221 of 2014, the former having been renumbered as OA No.1653 of 2017. The third application was filed before the DRT, Bengaluru which was registered as OA No.1930 of 2014. Three recovery certificates were issued by the respective Tribunals covering the claims of the lending banks. Two recovery certificates by the Hyderabad Tribunal were issued on 08.09.2015 and 17.10.2017 for a sum of Rs.14,50,06,349.23/and Rs.1408,03,14,857.40/respectively. In the case registered as OA No.221 of 2014, the State Bank of Hyderabad was the applicant bank. In OA No. 154 of 2014, all these banks filed a composite application. In OA No.1930 of 2014, the proceeding brought by State Bank of Bikaner and Jaipur, recovery certificate was issued on 04.08.2017 for a sum of Rs.5,22,21,750/. In respect of the recovery certificate issued on 17.10.2017, the State Bank of India claimed to be entitled to Rs.368,22,13,348.59/.

3. The State Bank of India’s application under Section 7 of the IBC was filed on 06.09.2019 before the NCLT, founded on all the three recovery certificates in which the first respondent had substantial stake. In its order passed on 12.01.2021, the adjudicating authority admitted the application and declared moratorium in terms of Section 14 of the IBC. By this order, one G. Satyanarayana Murty was appointed as Interim Resolution Professional (IRP). The appellant, who was the managing director of the corporate debtor, appealed against the said decision of the NCLT admitting the application and declaring moratorium primarily on the ground of limitation. Before the National Company Law Appellate Tribunal (the Appellate Tribunal), a point was urged, apart from the issue of limitation, that the application had been initiated as per the Reserve Bank of India circular dated 12.02.2018 which was held to be ultra vires the provision of Section 35AA of the Banking Regulation Act, 1949 by this Court in the case of Dharani Sugars and Chemicals Ltd. vs. Union of India and Others [(2019) 5 SCC 480]. This circular essentially laid down norms for, inter-alia, invoking IBC in relation to stressed assets. The NCLT had taken into co