IBC Laws Blog

ONE PAGE # 20 – Kerala Ayurveda Ltd Vs Tata Global Beverages Ltd

ONE PAGE # 20 – Kerala Ayurveda Ltd Vs Tata Global Beverages Ltd
True extract of statement of accounts maintained by FC: An evidence for Limitation
Court:  NCLT Kochi & NCLAT Chennai Bench AT# 13/2021 Dt 16.03.2021

1. Facts of the Case:

a. Appeal is filed by the CD aggrieved by dismissal of IA by NCLT as given below.

2. Proceedings @NCLT:

a. IA has been filed by the CD challenging the Sec 7 application filed by Tata Global Beverages Ltd (FC) under limitation.

b. CD had taken Inter Corporate Deposit (ICD) from the FC for 120 days with a maturity date as 12.11.2013 which was later renewed upto 30.06.2014. Thereafter, the ICD was not renewed.

c. In 2014, a tripartite agreement was made between CD, FC and Arudrama Developers Pvt Ltd (ADPL) whereby ADPL unconditionally and irrevocably guaranteed the payment to FC, subject to the terms and conditions therein. ADPL even deposited title deeds in respect of some immovable property as security with FC. So, FC has to proceed against the Guarantor, ADPL and not against CD.

d. ADPL paid interest and made a part payment to the tune of Rs.75 lakhs till 2017 but no payment or acknowledgement was made by the CD from 2014. Hence, Sec 7 application filed on 01.11.2019 after a lapse of more than 5yrs, is barred by limitation.

e. FC stated that CD made payment of outstanding dues till 2017 which extends the period of limitation u/s 19 of Limitation Act. Further, the ICD is secured by mortgage and u/s 62 of Limitation Act, the period of limitation to enforce payment of money under mortgage is 12yrs. Also, a specific admission was made by CD to FC on 31.03.2018.

f. NCLT dismissed the IA stating that the true extract of statement of accounts maintained by FC clearly depicts that the period of non-payment is from 2017 and the last date of payment received by the FC is 24.11.2017 & thus the claim is well within limitation.  

3. Discussions & Judgment by NCLAT:

a. NCLAT posed query as to “How the instant appeal is ex facie maintainable in the teeth of ingredients of Sec 61(1) and that NCLAT without any haziness holds that the it is not maintainable in law; yet it grants liberty to the CD to raise the plea of limitation in the main sec 7 application.

b. It is open for the CD to raise plea of veracity/admissibility of “true extract of statement of accounts” maintained by the CD in the Sec 7 application.

c. Both parties to be given liberty to marshal on factual and legal pleas and NCLT to provide adequate opportunity of hearing both the parties and to pass a reasoned speaking order on merits in a fair, just and dispassionate manner and to dispose the Sec 7 application, uninfluenced and untrammeled with any observation made by this NCLAT.  

d. With the above observation and direction, NCLAT disposed the IA with no costs.

MS Mano Ranjani

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