GAURAV HARGOVINDBHAI DAVE versus ASSET RECONSTRUCTION COMPANY (INDIA) LTD. & ANR.

Citation: [2019] 13 S.C.R. 224 · Decided: 18-09-2019 · Supreme Court of India · Bench: R.F. NARIMAN · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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SUPREME COURT REPORTS
[2019] 13 S.C.R.
GAURAV HARGOVINDBHAI DAVE
v.
ASSET RECONSTRUCTION COMPANY (INDIA) LTD. & ANR.
(Civil Appeal No. 4952 of 2019)
SEPTEMBER 18, 2019
[R. F. NARIMAN, R. SUBHASH REDDY
AND SURYA KANT, JJ.]
Limitation Act, 1963:
Articles 62 and 137 – Applicability of – To application u/s. 7
of Insolvency and Bankruptcy Code – Admission of application
u/s. 7 applying Art. 62 – Held: Art. 62 is applicable to only suits –
An application u/s. 7 would fall within the residuary Art. 137 –
Applying Art. 137, in the facts of the present case, application u/s.
7 is time-barred – There is no equity about limitation – It is not open
to the court to interpret Articles of Limitation Act, when applicability
of a particular Article is clear.
Allowing the appeal, the Court
HELD: 1. Article 62 of the Limitation Act is out of the way,
on the ground that it would only apply to suits. The present case
being “an application” which is filed under Section 7 of Insolvency
and Bankruptcy Code,  would fall only within the residuary article
137. Time, therefore, begins to run on 21.07.2011, as a result of
which the application filed under Section 7 would clearly be time-
barred. [Para 6][227-A-B]
2. The Report of the Insolvency Law Committee itself
stated that the intent of the Insolvency and Bankruptcy Code
could not have been to give a new lease of life to debts which are
already time-barred. Further, it is not for the Court to interpret,
commercially or otherwise, articles of the Limitation Act when it
is clear that a particular Article gets attracted. It is well settled
that there is no equity about limitation -  judgments have stated
that often time periods provided by the Limitation Act can be
arbitrary in nature. [Paras 6 and 7][227-C-D]
 [2019] 13 S.C.R. 224
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B.K.Educational Services Private Limited vs. Parag
Gupta and Associates, 2018 SCC OnLine SC 1921 –
referred to.
Case Law Reference
(2018) SCC OnLine SC 1921
referred to
Para 4
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4952
of 2019.
From the Judgment and Order dated 02.05.2019 of the National
Company Law Appellate Tribunal, New Delhi in Company Appeal (AT)
(Insolvency) No.655 of 2018.
Aditya Parolia, Piyush Singh, Akshay Srivastava and Gaurav Goel,
Advs. for the Appellant.
Debal Banerjee, Sr. Adv., P. S. Sudheer, Rishi Maheshwari,
Mrs. Mayuri Nayyar Chawla, Ms. Anne Mathew, Bharat Sood and
Ms. Shruti Jose, Advs. for the Respondents.
The Judgement of the Court was delivered by
R. F. NARIMAN, J.
1. In the present case, the Respondent No.2 was declared NPA
on 21.07.2011.  At that point of time, the State Bank of India filed two
O.As in the Debt Recovery Tribunal in 2012 in order to recover a total
debt of 50 Crores of rupees. In the meanwhile, by an assignment dated
28.03.2014, the State Bank of India assigned the aforesaid debt to
Respondent No.1. The Debt Recovery Tribunal proceedings reached
judgment on 10.06.2016, the Tribunal holding that the O. As filed before
it were not maintainable for the reasons given therein.
2. As against the aforesaid judgment, Special Civil Application
Nos. 10621-10622 were filed before the Gujarat High Court which
resulted in the High Court remanding the aforesaid matter. From this
order, a Special Leave Petition was dismissed on 25.03.2017.
3. An independent proceeding was then begun by Respondent
No.1 on 03.10.2017 being in the form of a Section 7 application filed
under the Insolvency and Bankruptcy Code in order to recover the original
debt together with interest which now amounted to about 124 Crores of
rupees. In the Form-I that has statutorily to be annexed to the Section 7
GAURAV HARGOVINDBHAI DAVE v. ASSET RECONSTRUCTION
COMPANY (INDIA) LTD.
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SUPREME COURT REPORTS
[2019] 13 S.C.R.
application in Column II which was the date on which default occurred,
the date of the NPA i.e. 21.07.2011 was filled up. The NCLT applied
Article 62 of the Limitation Act which reads as follows:-
Description of suit 
Period of 
limitation
Time from which  
period begins to run
To enforce payment of 
money secured by a 
mortgage or otherwise 
charged upon 
immovable property
Twelve 
years 
When the 
money sued 
for becomes 
due 
Applying the aforesaid Article, the NCLT reached the conclusion
that since the limitation period was 12 years from the date on which the
money suit has become due, the aforesaid claim was filed within limitation
and hence admitted the Section 7 application. The
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