Balance sheet signing date is date of acknowledgment under Section 18 of the Limitation Act, 1963 – G.S. Buildtech Pvt. Ltd. Vs. Ardee Infrastructure Venture Pvt. Ltd. – NCLAT New Delhi

The Adjudicating Authority rejected the CIRP application filed u/s 7 on the limitation ground and no evidence to show that any interest has ever been paid or not. NCLAT set aside the order and held that the Balance Sheet for the Financial Year 2016-17 having been signed on 01.09.2017 and the above Application having been filed on 20.03.2020, it is well within three years’ period from acknowledgment of debt as claimed by the Appellant. On interest component ground, it held that the definition under Section 5(8) of the Code, begins with the expression ‘financial debt’ means a debt alongwith interest, if any. Thus a financial debt may be with interest, if any. The definition clearly contemplates that debt along with interest is not mandatory to be there it to be a financial debt. Interest will be a part of the debt only if there is interest in the transaction. Words ‘if any’ after the word interest clearly indicates that it is not mandatory that debt should be alongwith interest in all cases.

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If any Public depositor applies showing due of the debt claiming itself as operational creditor and the Resolution Professional or the Tribunal do not accept the claim on the ground that they are not financial creditor, we allow the appellant to raise the question before the Tribunal and if any adverse decision is given by the Tribunal, it will be open to the appellant to raise the issue before NCLAT- Hind Motors India Ltd. Vs. Adjudicating Authority NCLT, Chandigarh – NCLAT New Delhi

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