AXIS BANK LIMITED versus NAREN SHETH & ANR.

Citation: [2023] 14 S.C.R. 581 · Decided: 12-09-2023 · Supreme Court of India · Bench: VIKRAM NATH · Disposal: Dismissed

Cited by 1 judgment(s) · cites 4 · see the full citation network in Lexace

Judgment (excerpt)

[2023] 14 S.C.R. 581 : 2023 INSC 820
581
CASE DETAILS
AXIS BANK LIMITED
v.
NAREN SHETH & ANR.
(Civil Appeal No. 2085 of 2022)
SEPTEMBER 12, 2023
[VIKRAM NATH AND AHSANUDDIN AMANULLAH, JJ.]
HEADNOTES
Issue for consideration: NCLAT dismissed the appeal fi led by the 
appellant upholding the order passed by the Adjudicating Authority whereby 
it admitted the application u/s.7, Insolvency and Bankruptcy Code, 2016 
fi led by Respondent No.2-Secured Creditor against the Corporate Debtor, 
after condoning the delay. Respondent No.2 whether entitled to the benefi t 
of s.18, Limitation Act and whether s.5 thereof would also be applicable.
Insolvency and Bankruptcy Code, 2016 – s.7 – Limitation Act, 
1963 – ss.18, 5 – Respondent No.2 fi led application u/s.7 against the 
Corporate Debtor on 22.01.20 along with the application for condoning 
delay of 1392 days – Later, it stated that the delay was only of 662 days 
in view of the acknowledgement in the Balance Sheet of the Corporate 
Debtor for the fi nancial year ending 31.03.2015 – Appellant inter alia 
pleaded that Respondent No.2 admitted in its s.7 petition that there 
was a delay of 1392 days – According to it, the Corporate Debtor was 
declared as NPA on 28.06.2013, w.e.f 31.03.2013, as per the Balance Sheet 
and the limitation of three years would expire on 31.03.2016 and thus, 
the application u/s.7 fi led in 2020 was barred by limitation – Whether 
the debt acknowledged in the balance sheet of the fi nancial year ending 
on 31.03.2015 and the three OTS proposals would give a fresh life of 
limitation of three years from each of the respective dates:
Held: Respondent No.2 declared the Corporate Debtor as an NPA on 
28.06.2013 – Therefore, the limitation period would be three years from the 
last date of the fi nancial year previous to the declaration of NPA, which would 
be 31.03.2013, and would run up to 31.03.2016 – If there were no further 
582 
SUPREME COURT REPORTS 
[2023] 14 S.C.R.
intervening circumstances or developments relating to acknowledgment, the 
petition u/s.7 would be barred by limitation as contended by the appellant 
– However, there are four major acknowledgments made by the Corporate 
Debtor after the declaration of the NPA and within the expiry of three years 
from the said date – Corporate Debtor in its balance sheet for the fi nancial 
year 2014-15, which came to an end on 31.03.2015, acknowledged the 
debt in its balance sheet for the said year – A balance sheet acknowledging 
debt is also a document relevant for calculating the limitation – This 
acknowledgment of debt in the balance sheet is a valid acknowledgment 
for the benefi t of s.18, Limitation Act – Petition u/s.7 was fi led within three 
years from the date of the fi rst, second and the third One-Time Settlement 
(OTS) proposals – Taking the date of acknowledgment of debt in Balance 
Sheet and the three OTS proposals the same were within the limitation 
under law or the extended limitation due to acknowledgments – Application 
of Respondent No.2 entitled to benefi t of ss.5 and 18, Limitation Act and, 
therefore, was within time – No merit in the appeal. [Paras 13-15, 27, 28]
Insolvency and Bankruptcy Code, 2016 – Limitation Act, 1963 – 
s.14:
Held: s.14 of the Limitation Act will have no application in the present 
case inasmuch as the proceedings under the SARFAESI Act before the DRT 
cannot be said to be before a Court or Tribunal having no jurisdiction – 
Respondent No.2, being a Secured Creditor, would defi nitely have a right 
to invoke the power under the SARFAESI Act and the said proceedings 
cannot be said to be without jurisdiction – Therefore, no benefi t u/s.14 would 
be admissible to Respondent No.2 – Securitization and Reconstruction of 
Financial Assets and Enforcement of Security Interest Act, 2002. [Para 12]
LIST OF CITATIONS AND OTHER REFERENCES
Dena Bank (Now Bank of Baroda) vs. C. Sivakumar Reddy and Another 
(2021) 10 SCC 330; Kotak Mahindra Bank Limited vs. Kew Precision Parts 
Private Limited and Ors (2022) 9 SCC 364; Asset Reconstruction Company 
(India) Limited vs. Bishal Jaiswal and Another (2021) 6 SCC 366 – relied on.
Jignesh Shah & Anr. vs. Union of India & Anr. 2019 (10) SCC 750 : 
[2019] 12 SCR 678; M/s Invent Asset Securitisation & Reconstruction Pvt. 
Limited vs. M/s Girnar Fibres Ltd. 2022 SCC Online SC 808; Invent Assets 
583
Securitization and Reconstruction Private Limited vs. Xylon Electrotechnic 
Private Limited Civil Appeal No. 3783 of 2020; Vashdeo R. Bhoj

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