PUNJAB NATIONAL BANK versus MR. VIJAY SITARAM DANDNAIK & ANR.

Citation: [2022] 18 S.C.R. 380 · Decided: 30-08-2022 · Supreme Court of India · Bench: S. ABDUL NAZEER · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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380
SUPREME COURT REPORTS
[2022] 18 S.C.R.
380
PUNJAB NATIONAL BANK
v.
MR. VIJAY SITARAM DANDNAIK & ANR.
(Civil Appeal No. 2277 of 2021)
AUGUST 30, 2022
[S. ABDUL NAZEER AND V. RAMASUBRAMANIAN, JJ.]
Insolvency and Bankruptcy Code, 2016: ss. 7, 238A –
Limitation Act, 1963 – Art. 137 – Initiation of corporate insolvency
resolution process by financial creditor – Limitation period – On
facts, corporate debtor defaulted in repayment and became a NPA
– Financial creditor-Bank filed a petition u/s. 7 to initiate Corporate
insolvency resolution process against the Corporate Debtor – Bank
also filed application before DRT for issue of certificate of recovery,
wherein by order dated 01.11.2016, the DRT directed the corporate
debtor and others including respondent no. 1 to jointly and severally
pay to the Bank – In a parallel proceeding, the High Court directing
the winding up of the Corporate Debtor – Petition u/s. 7 admitted
by the NCLT by order dated 06.11.2019 – Challenge to, by the first
respondent claiming to be 50% shareholder, promoter, director and
creditor of the Corporate Debtor – NCLAT set aside the order of
the NCLT on the ground that the claim of the Financial Creditor
was barred by limitation – On appeal, held: Order of the DRT in the
Original Application filed by the Bank u/s. 19 of the Act, 1993, is
dated 01.11.2016 – It is only thereafter that the Corporate Debtor
issued Balance and Security Confirmation letter dated 17.06.2017,
apart from making a request for restructuring the loan – Thus, the
application filed by the bank u/s.7 was clearly within three years
from the date on which the “right to apply” in terms of Art. 137
accrued – Thus, the application filed by the Bank u/s. 7 was within
the period of limitation – Recovery of Debts due to Banks and
Financial Institutions Act, 1993.
Dena Bank vs. C. Shivakumar Reddy and Another
(2021) 10 SCC 330 : 2021 (7 ) JT 405 – relied on.
Jaipur Metals and Electricals Employees Organization
vs. Jaipur Metals and Electricals Ltd. & Ors. (2019) 4
SCC 227 : [2018] 14 SCR 926; Babulal Vardharji
[2022] 18 S.C.R. 380
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381
Gurjar vs. Veer Gurjar Aluminium Industries Pvt. Ltd.
& Anr. (2020) 15 SCC 1; B.K. Educational Services
Private Limited vs. Parag Gupta and Associates (2019)
11 SCC 633 : [2018] 12 SCR 794; Jignesh Shah and
Anr. vs. Union of India and Anr. (2019) 10 SCC 750 :
[2019] 12 SCR 678; Vashdeo R. Bhojwani vs.
Abhyudaya Co-operative Bank Ltd. & Anr (2019) 9
SCC 158 : [2019] 12 SCR 75; Asset Reconstruction
Company (India) Limited vs. Bishal Jaiswal and Anr.
(2021) 6 SCC 366 : 2021 (7) JT 562; Kotak Mahindra
Bank Ltd. Vs. A. Balakrishnan (2020) SCC OnLine SC
706; Innoventive Industries Ltd. vs. ICICI Bank & Anr.
(2018) 1 SCC 407 : [2017] 8 SCR 33 – referred to.
Case Law Reference
[2018] 14 SCR 926
referred to
Para 5
[2018] 12 SCR 794
referred to
Para 10
[2019] 12 SCR 678
referred to
Para 11
[2019] 12 SCR 75
referred to
Para 13
(2021) 10 SCC 330
relied on
Para 17
[2017] 8 SCR 33
referred to
Para 19
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2277
of 2021.
From the Judgment and Order dated 02.03.2021 of the National
Company Law Appellate Tribunal, Delhi in Appeal (AT) (Ins.) No. 90 of
2020.
Dhruv Mehta, Sr. Adv., Ms. Kusum Lata, Mahesh K. Chaudhary,
Sushmita Chaudhary, Ms. Sushma Das, Advs. for the Appellant.
Rahul Totala, Rohit Anil Rathi, Advs. for the Respondents.
The following Order of the Court was passed:
ORDER
1. The order of admission of their petition under Section 7 of the
Insolvency and Bankruptcy Code, 2016 (for short “IBC”) passed by the
National Company Law Tribunal (for short “NCLT”), having been
PUNJAB NATIONAL BANK v. MR. VIJAY SITARAM
DANDNAIK & ANR.
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SUPREME COURT REPORTS
[2022] 18 S.C.R.
reversed by the National Company Law Appellate Tribunal (for short
“NCLAT”) on the ground that the application was barred by limitation,
the Financial Creditor-Punjab National Bank has come up with the above
appeal.
2. We have heard Shri Dhruv Mehta, learned senior counsel
appearing for the appellant and Shri Rahul Totala, learned counsel
appearing for the respondents.
3. The appellant herein filed a petition under Section 7 IBC against
M/s Jailaxmi Sugar Products Pvt. Limited, the Corporate Debtor, who is
the second respondent herein claiming, inter alia, (i) that vide sanction
letters dated 07.05.2010 and 28.09.2010, a term loan was sanctioned to
the second respondent herein; (ii) that by a letter dated 17.09.201
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