VIDYASAGAR PRASAD versus UCO BANK & ANR.

VIDYASAGAR PRASAD versus UCO BANK & ANR.

Entries in the Corporate Debtor's balance sheet together with the auditor's note and the OTS proposal amounted to a written acknowledgement of subsisting liability under Section 18 of the Limitation Act read with Section 238A of the IBC; therefore the Section 7 application filed on 13.02.2019 was within the extended period of limitation and the admission of CIRP was correctly upheld by NCLT and affirmed by NCLAT; the Civil Appeal was dismissed.

Parties
Appellant: Vidyasagar Prasad; Respondent: UCO Bank; Respondent: Corporate Debtor
Jurisdiction
India
Judgment Date
22 October 2024
Procedural Posture
Civil Appeal / Appeal Against NCLAT Order; Supreme Court Judgment on Appeal
Outcome
Civil Appeal dismissed
Legal Topics
Acknowledgement of Debt, Limitation Under Section 18, CIRP Admission, Balance Sheet Entries, One Time Settlement (ots)
Insolvency and Bankruptcy Limitation Law Company Law Acknowledgement of Debt Limitation Under Section 18 CIRP Admission Balance Sheet Entries One Time Settlement (ots)

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Parties

Vidyasagar Prasad

Appellant

UCO Bank

Respondent

Corporate Debtor

Respondent

Procedural Posture

Civil Appeal / Appeal Against NCLAT Order; Supreme Court Judgment on Appeal

Legal Issues

  1. 1 Whether specific and clear acknowledgement of debt by the Corporate Debtor in its balance sheet is necessary while considering limitation under Section 18 of the Limitation Act read with Section 238A of the IBC
  2. 2 Whether balance sheet entries that do not specifically name the financial creditor can constitute an acknowledgement of debt for the purpose of extending limitation
  3. 3 Whether a One Time Settlement (OTS) proposal can constitute acknowledgement under Section 18

Ratio Decidendi

Entries in the Corporate Debtor's balance sheet together with the auditor's note and the OTS proposal amounted to a written acknowledgement of subsisting liability under Section 18 of the Limitation Act read with Section 238A of the IBC; therefore the Section 7 application filed on 13.02.2019 was within the extended period of limitation and the admission of CIRP was correctly upheld by NCLT and affirmed by NCLAT; the Civil Appeal was dismissed.

Court Disposition

Civil Appeal dismissed

Orders

  • Order of NCLAT dated 04.10.2021 (Company Appeal (AT) (Insolvency) No. 238 of 2020) affirmed
  • Admission of CIRP by NCLT dated 13.12.2019 affirmed