The National Company Law Appellate Tribunal (NCLAT) affirmed that the limitation period will not be extended in The Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (SARFAESI) and Debt Recovery Tribunal (DRT) Proceedings on the part payment under the Insolvency and Bankruptcy Code (IBC), 2016.
In the case of Bimalkumar Manubhai Savalia Vs. Bank of India, the National Company Law Appellate Tribunal (NCLAT) reversed the order passed by the National Company Law Tribunal (NCLT) and observed that the admission of application which was filed by Bank of India as the Financial Creditor under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016 was held to be time-barred.
The National Company Law Tribunal (NCLT) admitted the application filed by the respondent in the capacity of Financial Creditor under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016 on the grounds that the corporate debtor defaulted in payment of loan facility, which was availed by the corporate debtor. The appellant claimed that the proceeding is not maintainable.
The National Company Law Appellate Tribunal (NCLAT) consisting of a judicial member Justice Venugopal and technical members Kanthi Narahari and V.P. Singh reversed the order passed by the National Company Law Tribunal (NCLT) and observed that the admission of application which was filed by Bank of India as the Financial Creditor under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016 was held to be time-barred. Despite the fact that the guarantor has paid the part payment or not.
Therefore, the appellate tribunal held that the Financial Creditor did not accept OTS, therefore, the same cannot be treated as an acknowledgement in view of Section 18 of the Limitation Act, 1963. From the records, it is seen that the Appellant also made OTS Proposal on 28.04.2016 prior to the OTS Proposal i.e., 01.06.2016.
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