AXIS BANK LIMITED versus NAREN SHETH & ANR.

AXIS BANK LIMITED versus NAREN SHETH & ANR.

Acknowledgements by the corporate debtor in its balance sheet for FY ending 31.03.2015 and subsequent one-time settlement (OTS) proposals dated 16.03.2017, 01.01.2018 and 16.05.2019 were valid acknowledgments within the prescribed period under Section 18, and Section 5 enabled condonation of delay; Section 14 did not apply because SARFAESI/DRT proceedings were not without jurisdiction; therefore the Section 7 petition filed on 22.01.2020 was within the extended limitation and the admission under Section 7 IBC was correct.

Parties
Appellant: Axis Bank Limited; Respondent: Naren Sheth & Anr.
Jurisdiction
India
Judgment Date
12 September 2023
Procedural Posture
Civil Appeal Under Section 62, Insolvency and Bankruptcy Code, 2016 / Appeal From NCLAT Order Upholding Adjudicating Authority's Admission Under Section 7 Ibc; Judgment on Appeal
Outcome
Appeal dismissed
Legal Topics
Section 7 IBC, Section 18 Limitation Act (acknowledgement), Section 5 Limitation Act (condonation of Delay), Section 14 Limitation Act (jurisdiction), One Time Settlement (ots), Acknowledgement in Balance Sheet, Non Performing Asset (npa)
Insolvency and Bankruptcy Code, 2016 Limitation Act, 1963 Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 Section 7 IBC Section 18 Limitation Act (acknowledgement) Section 5 Limitation Act (condonation of Delay) Section 14 Limitation Act (jurisdiction) One Time Settlement (ots) +2 more

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Parties

Axis Bank Limited

Appellant

Naren Sheth & Anr.

Respondent

Procedural Posture

Civil Appeal Under Section 62, Insolvency and Bankruptcy Code, 2016 / Appeal From NCLAT Order Upholding Adjudicating Authority's Admission Under Section 7 Ibc; Judgment on Appeal

Legal Issues

  1. 1 Whether respondent (secured creditor) is entitled to benefit of Section 18 Limitation Act by reason of acknowledgements in balance sheet and OTS proposals
  2. 2 Whether Section 5 Limitation Act applies to condone delay in filing Section 7 IBC petition
  3. 3 Whether Section 14 Limitation Act applies in relation to SARFAESI/DRT proceedings

Ratio Decidendi

Acknowledgements by the corporate debtor in its balance sheet for FY ending 31.03.2015 and subsequent one-time settlement (OTS) proposals dated 16.03.2017, 01.01.2018 and 16.05.2019 were valid acknowledgments within the prescribed period under Section 18, and Section 5 enabled condonation of delay; Section 14 did not apply because SARFAESI/DRT proceedings were not without jurisdiction; therefore the Section 7 petition filed on 22.01.2020 was within the extended limitation and the admission under Section 7 IBC was correct.

Court Disposition

Appeal dismissed

Orders

  • Civil Appeal No.2085 of 2022 dismissed
  • Order of admission dated 22.09.2021 under Section 7 IBC (as upheld by NCLAT) stands affirmed