RAJENDRA NAROTTAMDAS SHETH & ANR. versus CHANDRA PRAKASH JAIN & ANR.

RAJENDRA NAROTTAMDAS SHETH & ANR. versus CHANDRA PRAKASH JAIN & ANR.

The Court held that a power of attorney conferring general authority to manage the bank's business and to commence and conduct legal proceedings empowered the holder to sign Form 1 and file an application under Section 7; and that acknowledgements in writing by the corporate debtor dated 17.11.2018 and records showing subsequent acknowledgements were sufficient under Section 18 of the Limitation Act to extend the period of limitation, making the Section 7 application not time-barred.

Parties
Appellants: RAJENDRA NAROTTAMDAS SHETH & ANR.; Respondents: CHANDRA PRAKASH JAIN & ANR.; Financial Creditor / Respondent: UNION BANK OF INDIA
Jurisdiction
India
Judgment Date
30 September 2021
Procedural Posture
Civil Appeal / Appeal to Supreme Court From NCLAT Order Challenging Admission of Section 7 Application Under the Insolvency and Bankruptcy Code, 2016
Outcome
Appeal dismissed
Legal Topics
Section 7 IBC (initiation by Financial Creditor), Power of Attorney and Authority to File Section 7, Limitation Act S.18 Acknowledgement, Form 1 and Rule 4 (application to Adjudicating Authority), Section 238 a IBC (applicability of Limitation Act)
Insolvency and Bankruptcy Civil Procedure Limitation Section 7 IBC (initiation by Financial Creditor) Power of Attorney and Authority to File Section 7 Limitation Act S.18 Acknowledgement Form 1 and Rule 4 (application to Adjudicating Authority) Section 238 a IBC (applicability of Limitation Act)

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Parties

RAJENDRA NAROTTAMDAS SHETH & ANR.

Appellants

CHANDRA PRAKASH JAIN & ANR.

Respondents

UNION BANK OF INDIA

Financial Creditor / Respondent

Procedural Posture

Civil Appeal / Appeal to Supreme Court From NCLAT Order Challenging Admission of Section 7 Application Under the Insolvency and Bankruptcy Code, 2016

Legal Issues

  1. 1 Whether an application under Section 7 of the IBC filed by a power of attorney holder is maintainable
  2. 2 Whether the Section 7 application was time-barred and whether Section 18 of the Limitation Act applies by reason of acknowledgements in writing by the corporate debtor

Ratio Decidendi

The Court held that a power of attorney conferring general authority to manage the bank's business and to commence and conduct legal proceedings empowered the holder to sign Form 1 and file an application under Section 7; and that acknowledgements in writing by the corporate debtor dated 17.11.2018 and records showing subsequent acknowledgements were sufficient under Section 18 of the Limitation Act to extend the period of limitation, making the Section 7 application not time-barred.

Court Disposition

Appeal dismissed

Orders

  • Appeal dismissed
  • Order of the NCLT admitting the Section 7 application was upheld (application held maintainable and not barred by limitation)