The National Company Law Appellate Tribunal (NCLAT), New Delhi Bench comprising Justice Ashok Bhushan, Chairperson and Barun Mitra, Technical Member was hearing an Appeal on Thursday challenging the acknowledgement of debt and limitation by the Corporate Debtor/Borrower and held that any OTS Proposal which was submitted if it contains acknowledgement, limitation will be extended by virtue of Section 18 of the Limitation Act.
The present Appeal has been filed against the Order of the Adjudicating Authority, by which Order an Application filed by the Financial Creditor under Section 7 of the Code has been admitted by the Adjudicating Authority.
In the present case, the learned Counsel for the Appellant challenging the Order contended that the Application filed by the Union Bank of India was barred by time and hence could not have been admitted. He submitted that there was no specific pleading within the meaning of Section 18 of the Limitation Act with regard to OTS Proposal dated 16.09.2019 which has been relied upon by the Adjudicating Authority for holding it within time. It is further submitted that OTS Proposal which was submitted by the Appellant was not an unconditional proposal hence there was no clear acknowledgement.
The Appellate Authority observed that Section 7 Application has been filed by the Financial Creditor, in which Part-IV of the Application contains “particulars of financial debt” giving details of all transactions and the OTS Proposal which has been relied on by the Adjudicating Authority has also been specifically mentioned in the Application and the Copy of the said OTS Letter was also filed along with Application. It was a clear acknowledgement by the Corporate Debtor.
In the present case, the submission which has been pressed by learned Counsel for the Appellant is that there was no specific pleading that the Appellant is claiming the benefit of Section 18 of the Limitation Act for extension of limitation.
The Appellate Tribunal noted that when the facts regarding OTS Proposal were received from the Corporate Debtor within three years from the date, the account was declared NPA was specifically pleaded and OTS Proposal brought on record, the pleadings are not wanting in any manner. Mere non-mention of Section 18 of the Limitation Act is inconsequential when the relevant facts and materials were pleaded and brought on record. Any OTS Proposal which was submitted if it contains acknowledgement, limitation will be extended by virtue of Section 18 of the Limitation Act.
The second submission which has been pressed by Learned counsel for the Appellant is that there is no clear acknowledgement in the OTS Proposal.
The Appellate Authority noted that the above proposal made on behalf of the Appellant is a clear acknowledgement of the debt of the Bank. Reliance by Learned Counsel for the Appellant on the last words “subject to mutual understanding” is about the interest since the Appellant was requesting for not charging the interest hence such observation in no manner affects the acknowledgement of the debt which is contained in the main part of the OTS.
The Appellate Tribunal reiterated that the OTS Proposal cannot be held to be wanting in any manner as acknowledgement under Section 18 of the Limitation Act and the Application was not barred by time. The Adjudicating Authority did not commit any error in admitting the Section 7 Application.
The Appeal was dismissed.