# In the matter of M. Seshavatharam

> HC judgment dated 2023-04-13. Citation: TCN-2023-HC-00064. The writ petition challenges the legality and validity of an order dated 30.03.2021 passed by the…

- **Court:** HC
- **Order date:** 13 Apr 2023
- **Citation:** TCN-2023-HC-00064
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-new-delhi/m-seshavatharam-d995fcd2

## Summary

### Background

The writ petition challenges the legality and validity of an order dated 30.03.2021 passed by the National Company Law Tribunal (NCLT), Hyderabad Bench-I, which dismissed an interlocutory application filed by the petitioner. The petitioner, a suspended director of M/s. Guruprabha Power Limited (corporate debtor), sought a review of the order directing liquidation and initiating the Corporate Insolvency Resolution Process (CIRP). The petitioner contended that the application filed by Respondent No. 2 under Section 7 of the Insolvency and Bankruptcy Code (IBC) was barred by limitation. The NCLT had initially admitted the application filed by Punjab National Bank (Respondent No. 2) under Section 7 of the IBC, initiating CIRP against the corporate debtor. The corporate

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## Facts

M/s. Guruprabha Power Limited (corporate debtor) approached Punjab National Bank (respondent No. 2) for financial assistance. Respondent No. 2 sanctioned a Rupee Term Loan-I of Rs. 28,88,40,000-00 and a Rupee Term Loan-II of Rs. 4,35,30,000-00, along with a cash credit limit of Rs. 6,50,00,000-00. The corporate debtor faced financial difficulties and defaulted on payments to respondent No. 2. Respondent No. 2 declared the loan account as a non-performing asset (NPA) on 31.05.2007 and issued a notice under Section 13(2) of the SARFAESI Act on 27.06.2011. The corporate debtor approached the Debts Recovery Tribunal (DRT) by filing securitization application No. 259 of 2011. The DRT ordered the corporate debtor to deposit Rs. 1.27 crores with respondent No. 2 to enable

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## Issues and analysis

### Issue 1: Whether the application filed by Respondent No. 2 under Section 7 of the Insolvency and Bankruptcy …

**Ratio:** Section 18 of the Limitation Act, 1963, is applicable to applications filed under Section

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**Reasoning:** The High Court considered the acknowledgments of debt by the corporate debtor in e-mail

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**Interpretation:** The interpretation of Section 18 of the Limitation Act, 1963, in conjunction

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**Application:** In this case, the High Court found that the corporate debtor had acknowledged

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## Parties

- **Judges:** UJJAL B…; Surepalli…
- **Appellants:** M. Seshava…
- **Respondents:** M/s.Guruprabha…; National Company…

## Timeline

- **2007-05-31 — Loan Account Declared…**: Respondent No. 2 declared the loan account of the corporate debtor as a non-performing…
- **2011-06-27 — SARFAESI Notic…**: Respondent No. 2 issued a notice under…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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