STATE BANK OF INDIA versus KRISHIDHAN SEEDS PRIVATE LIMITED

Citation: [2022] 2 S.C.R. 1155 · Decided: 18-04-2022 · Supreme Court of India · Bench: D.Y. CHANDRACHUD, SURYA KANT · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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[2022] 2 S.C.R. 1155
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STATE BANK OF INDIA
v.
KRISHIDHAN SEEDS PRIVATE LIMITED
(Civil Appeal No. 910 of 2021)
APRIL 18, 2022
[DR. DHANANJAYA Y CHANDRACHUD AND
SURYA KANT, JJ.]
Insolvency and Bankruptcy Code 2016 – s.7 – Limitation Act,
1963 – s.18 – Applicability of – Default, acknowledgment in balance
sheet of company – Proceedings under IBC – Limitation – Appellant
filed application for initiation of Corporate Insolvency Resolution
Process (CIRP) on the ground that the respondent defaulted in paying
the financial debt – Date of default was mentioned as 10.06.14,
when the respondent’s account was declared as a Non-Performing
Asset (NPA) – Application rejected by NCLT on ground of limitation
observing that the account was declared an NPA on 10.06.14, while
the proceeding u/s.7 was instituted on 19.09.18, beyond three years
from the date on which the right to apply accrued – Order upheld
by NCLAT– On appeal, held: Judgment of NCLAT in V Padmakumar
v. Stressed Assets Stabilisation Fund and Another which was relied on
by NCLT has been overruled by a three-Judge Bench judgment of
Supreme Court in Asset Reconstruction Company (India) Limited v
Bishal Jaiswal and Anr.–An acknowledgment in a balance sheet
without a qualification can be relied upon for the purpose of the
proceedings under the IBC so long as the acknowledgment was
within a period of three years from the original date of default –
Provisions of s.18, Limitation Act are not alien to and are applicable
to proceedings under the IBC – However, in the present case since
proceedings are being restored back to NCLT for afresh adjudication
in view of decisions of Supreme Court, the factual dispute on whether
the application filed u/s.7 of the IBC would result in an initiation of
the CIRP is not being entered upon – Order of NCLAT and NCLT
set aside – All rights and contentions of the parties left open on the
factual aspects, to be adjudicated upon before the NCLT.
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SUPREME COURT REPORTS
[2022] 2 S.C.R.
Asset Reconstruction Company (India) Limited v Bishal
Jaiswal and Another (2021) 6 SCC 366; Laxmi Pat
Surana v Union Bank of India and Another (2021) 8
SCC 481; Rajendra Narottamdas Sheth and Another v
Chandra Prakash Jain and Another 2021 SCC OnLine
SC 843 – relied on.
Sesh Nath Singh v Baidyabati Sheoraphuli Coop. Bank
Ltd. (2021) 7 SCC 313; Dena Bank v C. Shivakumar
Reddy (2021) 10 SCC 330; State Bank of India v Vibha
Agro Tech Limited 2021 SCC OnLine SC 1297; Devas
Multimedia Private Ltd. v Antrix Corporation Ltd. and
Another 2022 SCC OnLine SC 46; SVG Fashions Pvt.
Ltd. (Earlier Known As SVG Fashions Ltd.) v Ritu Murli
Manohar Goyal and Another 2022 SCC OnLine SC
373 – referred to.
V Padmakumar v Stressed Assets Stabilisation Fund and
Another 2020 SCC Online NCLAT 417 – referred to.
Case Law Reference
(2021) 6 SCC 366
relied on
Para 8
(2021) 7 SCC 313
referred to
Para 9
(2021) 8 SCC 481
relied on
Para 10
(2021) 10 SCC 330
referred to
Para 12 (i)
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 910 of
2021.
From the Judgment and Order dated 17.11.2020 of the National
Company Law Appellate Tribunal, New Delhi in Company Appeal (AT)
(Insolvency) No.972 of 2020.
Niranjan Reddy, Sr. Adv., Divyam Agarwal, Ms. Fatema
Kachwalla, Ms. Pallavi Kumar, Karan Singh, Varghese Thomas, Advs.
for the Appellant.
Shyam Divan, Sr. Adv., Manu Agarwal, Vinayak Bhandari, Mrs.
Pragya Baghel, Advs. for the Respondent.
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The following Order of the Court was passed:
ORDER
1. The National Company Law Tribunal1, by its judgment dated
16 September 2020, rejected the application dated 19 September 20182
filed by the State Bank of India, the appellant, under Section 7 of the
Insolvency and Bankruptcy Code 20163 against the respondent, the
alleged Corporate Debtor, for initiation of the Corporate Insolvency
Resolution Process4.
2. The respondent received credit facilities from the appellant
commencing from 30 November 2006. According to the appellant, as on
24 June 2013, the outstanding under the credit facilities extended to the
respondent totaled to Rs 102.4 crores. In lieu of these credit facilities,
the respondent (along with other persons) provided securities in favor of
the appellant. The respondent allegedly failed to honor the terms of these
credit facilities and defaulted on their repayments. Hence, the respondent’s
account with the appellant was classified as a Non-Performing Asset5 on
10 June 2014.
3. Thereafter, at various jun
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