SVG FASHIONS PVT. LTD. (EARLIER KNOWN AS SVG FASHIONS LTD. vs RITU MURLI MANOHAR GOYAL

SVG FASHIONS PVT. LTD. (EARLIER KNOWN AS  SVG FASHIONS LTD.  vs RITU MURLI MANOHAR GOYAL

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले


NON­REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.4228 OF  2020
SVG FASHIONS PVT. LTD. (EARLIER KNOWN AS 
SVG FASHIONS LTD.                               …APPELLANT(S)
VERSUS
RITU MURLI MANOHAR GOYAL & ANR. …RESPONDENT(S)
J U D G M E N T
V.RAMASUBRAMANIAN, J.
1. Aggrieved by the order of the National Company Law Appellate
Tribunal (for short “NCLAT”), reversing the order of ‘Admission’ passed
by the National Company Law Tribunal (for short “NCLT”) and holding
that   their   application   under   Section   9   of   the   Insolvency   and
Bankruptcy   Code,   2016   (for   short  “the   Code”)   was   barred   by
1
limitation,   the   operational   creditor   has   come   up   with   the   present
appeal.
2. We have heard the learned counsel for the appellant­operational
creditor; the learned counsel for the first respondent­shareholder and
Director   of   the   corporate­debtor   and   the   learned   counsel   for   the
second respondent­Interim Resolution Professional. 
3. The appellant herein filed an application under Section 9 of the
Code on 20.04.2018 against M/S Arpita Filaments Private Limited,
contending  inter   alia:   that  the   corporate­debtor   started   having
business dealings with them from 2013; that they sold and delivered
various fabrics to the corporate­debtor; that the corporate­debtor was
irregular in making payments as per the bills; and that the demand
notice issued by them under Section 8 of the Code read with Rule 5
did not invoke any response.
4. Before NCLT, the corporate­debtor raised four major objections,
one of which was that the claim was barred by limitation. But NCLT
found on the basis of a letter dated 28.09.2015 produced by the
2
operational creditor that six cheques had been issued in favour of the
operational   creditor.   These   cheques   returned   dishonoured   when
presented for payment. The stand taken by the corporate­debtor was
that those six cheques were lost by the corporate­debtor in March
2017 and that they had already issued “stop payment instructions” to
the bank on 4.03.2017. The corporate­debtor also claimed that the
letter dated 28.09.2015 relied upon by the operational creditor was
issued by Shree Adeshwar Textiles and that therefore, the operational
creditor cannot rely upon the same to save limitation.
5. However, the NCLT, by an order dated 26.09.2019 overruled the
objections and held that there was an acknowledgment of liability on
the part of the corporate­debtor and that therefore, the application
was within the period of limitation. Consequently, the NCLT ordered
the admission of the application under Section 9 of the Code and also
declared moratorium in terms of Section 14.
6. On an appeal filed by the appellant, the NCLAT held that the
debt arose during the period from 11.08.2013 to 02.09.2013 and that
the   six   cheques   purportedly   issued   towards   part   payment   of   the
3
liability having been issued on 5.12.2017, will not save limitation. The
NCLAT further held that even if the date of default is taken to be
7.10.2013 as pleaded by the operational creditor, the acknowledgment
of liability in terms of Section 18 of the Limitation Act ought to have
happened   on   or   before   07.10.2016.   But   the   cheques   were   dated
December 2017 and hence NCLAT reversed the decision of NCLT and
dismissed the application of the operational creditor.
7. But   we   find   from   the   order   of   NCLAT   that   there   was   no
discussion at all about the letter dated 28.09.2015. According to the
operational creditor, the six cheques in question were handed over
along with the letter dated 28.09.2015. The cheque numbers and the
bank on which the cheques were drawn, given in the letter dated
28.09.2015 tallied with the particulars of those six cheques allegedly
lost   by   the   corporate   debtor   in   March   2017.   Though   the   first
respondent herein clamed in his affidavit in reply that the corporatedebtor had issued stop payment instructions, he conceded that the
acknowledgment issued by the banker contained the date 01.01.2018.
4
The   following   extract   from   the   affidavit   in   reply/objections   of   the
Director of the corporate­debtor makes an interesting reading:
“...Hereto annexed and marked collectively as Annexure­C
are copies of the intimation issued by the banker of the
Corporate   Debtor   duly   recording   the   instruction   of   stop
payment qua the cheques in question taking record that
the cheques had been lost. It is submitted that the banker
of   the   Corporate   Debtor   has   issued   such   notices
acknowledging stop payment instruction on account of loss
of the cheques on 04/03/2017, however inadvertently due
to the error in the computers of the banker, the date on the
top right shows as 01/01/2018. the Corporate Debtor in
the process of obtaining appropriate letter from the banker
of the Corporate Debtor to the effect that the error in the
date has occurred due to some problem in the computers of
the   banker,   and   the   Corporate   Debtor   craves   leave   to
produce copy of the same as and when referred to and
relied upon and available with the Corporate Debtor from
the banker.”
8. Unfortunately   NCLAT   completely   overlooked   the   pleadings
revolving around the letter dated 28.09.2015 and the six cheques.
The failure of the NCLAT as the first appellate authority to look into a
very vital aspect such as this, vitiates its order, especially when NCLT
has recorded a specific finding of fact on this.
9. It is needless to point out that the law relating to the applicability
of Section 18 of the Limitation Act, 1963 is fairly well settled. In
5
Jignesh Shah and Another  vs. Union of India and Another1
, this
Court   pointed   out   that   when   time   begins   to   run,   it   can   only   be
extended in the manner provided in the Limitation Act. For holding so
this   Court   made   a   reference   to   Section   18   of   the   Limitation   Act.
Though in Babu Lal Vardharji Gurjar  vs. Veer Gurjar Aluminium
Industries Private Limited and Another2
, a two member Bench of
this Court held that the reference in Jignesh Shah (supra) to Section
18 of the Limitation Act was only illustrative and that the ratio in B.K.
Educational   Services   Private   Limited   vs.   Parag   Gupta   and
Associates3 did not stand altered by  Jignesh  Shah, no discordant
note was struck. But the cloud of doubt created by Babu Lal (supra)
was cleared subsequently in Laxmi Pat Surana  vs. Union Bank of
India   And   Another4
.   In  Asset   Reconstruction   Company   (India)
Limited vs. Bishal Jaiswal and Another5
, this Court, while applying
Section 18 of the Limitation Act, even went to the extent of holding
that an entry in the balance sheet of the company could also be
1  (2019) 10 SCC 750
2  (2020) 15 SCC 1
3  (2019) 11 SCC 633
4  (2021) 8 SCC 481
5  (2021) 6 SCC 366
6
treated  as  an  acknowledgment  in  writing,  subject  however  to   any
caveat found in the accompanying reports.
10. The law as it has developed on the applicability of Section 18 of
the Limitation Act and the circumstances in which it would apply,
have also not been examined by NCLAT. Therefore, the order of NCLAT
is liable to be set aside and the matter liable to be remanded back for
a   fresh   consideration.   Accordingly,   the   appeal   is   allowed,   the
impugned order of NCLAT is set aside and the matter remanded back
to NCLAT for a fresh consideration in the light of the observations and
the principles of law indicated above. There will be no order as to
costs.   
…………………………….J.
(Hemant Gupta)
…………………………….J.
(V. Ramasubramanian)
New Delhi
March  29, 2022.
7

Comments

Popular posts from this blog

संविधान की प्रमुख विशेषताओं का उल्लेख | Characteristics of the Constitution of India

100 Questions on Indian Constitution for UPSC 2020 Pre Exam

भारतीय संविधान से संबंधित 100 महत्वपूर्ण प्रश्न उतर