The limitation commenced from the date of default reckoned on the basis of classification of Corporate Debtor’s account as NPA would not admit of any extension or exclusion on the basis of pursuit of a remedy under the SARFAESI Act, 2002 or in a recovery proceedings before the DRT – Invent Assets Securitization and Reconstruction Pvt. Ltd. Vs. Xylon Electrotechnic Pvt. Ltd. – NCLAT New Delhi
NCLAT held that it is manifestly clear that the determination of the claim of the proceedings before the DRT would neither extend the time nor exclude the period of limitation. The limitation commenced from the date of default reckoned on the basis of classification of Corporate Debtor’s account as NPA would not admit of any extension or exclusion on the basis of pursuit of a remedy under the ‘SARFAESI Act, 2002 or in a recovery proceedings before the DRT. The date of default computed with effect from the date of account of the ‘Corporate Debtor’ being classified as NPA would not shift as in the instant case proceedings taken before the DRT for recovery of the ‘financial debt’ would not be a proceeding being pursued before a wrong forum nor would that be a continuation of the cause of action. As regard the issue raised by the Appellant in regard to reflection of the ‘financial debt’ in the balance-sheet of the ‘Corporate Debtor’ for the relevant period amounting to acknowledgement of liability, it would suffice to refer to the following observations made in majority judgment of the four Member Bench of this Appellate Tribunal in V. Padmakumar v. Stressed Assets Stabilitation Fund (SASF) & Anr. – Company Appeal (AT) (Insolvency) No. 57 of 2020’ decided on 12th March, 2020.
