# In the matter of A. Balakrishnan Vs. Kotak Mahindra Bank Limited & Ors. Company Appeal (AT) (Insolvency) No. 1406 of 2019

> NCLAT judgment dated 2020-11-24. Citation: TCN-2020-NCLAT-00036. The case involves an appeal against an order passed by the Adjudicating Authority (National…

- **Court:** NCLAT
- **Order date:** 24 Nov 2020
- **Citation:** TCN-2020-NCLAT-00036
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/a-balakrishnan-vs-kotak-mahindra-bank-limited-ors-company-appeal-15e9f8dc

## Summary

### Background

The case involves an appeal against an order passed by the Adjudicating Authority (National Company Law Tribunal, Division Bench, Chennai) admitting an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) for initiating Corporate Insolvency Resolution Process (CIRP) against M/s. Prasad Properties and Investments Pvt. Ltd. The appeal was filed by a director of the Corporate Debtor, arguing that the application was time-barred. The Financial Creditor, Kotak Mahindra Bank Ltd., had filed the application based on a debt recovery certificate obtained after the Corporate Debtor defaulted on payments related to credit facilities availed by borrower entities, for which the Corporate Debtor acted as a guarantor/mortgagor.

## Facts

M/s. Prasad Properties and Investments Pvt. Ltd. (Corporate Debtor) acted as a corporate guarantor/mortgagor for credit facilities availed by Gemini Arts Pvt. Ltd., Green Gardens Pvt. Ltd., and Mahalaxmi Properties and Investments Pvt. Ltd. (Borrower Entities) from Indbank Housing Ltd. (IBHL). IBHL classified the Borrower Entities as Non-Performing Assets (NPA) in November 1997. IBHL filed civil suits against the Borrower Entities and the Corporate Debtor in 1998 and 1999. A compromise was reached, and a consent decree was recorded by the High Court of Madras on March 26, 2007. The Borrower Entities failed to make payments as per the compromise decree. Kotak Mahindra Bank Ltd. (Financial Creditor) acquired the debts of IBHL through assignment deeds dated October 13,

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## Issues and analysis

### Issue 1: Whether the Application under …

**Ratio:** The Limitation Act applies to applications filed under Section 7 of the IBC. The right to

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**Reasoning:** The NCLAT relied on several Supreme Court judgments, including Innoventive Industries

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**Interpretation:** The court interpreted Section 7 of the IBC in conjunction with the Limitation

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**Application:** In this case, the court found that the default occurred in November 1997 when

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## Parties

- **Judges:** A.I.S. C…; V. P. S…
- **Appellants:** A. Balakr…
- **Respondents:** M/s Prasad…; Kotak Mahindra…

## Timeline

- **1997-11-01 — Borrower Entities…**: Indbank Housing Ltd. (IBHL) classified the Borrower Entities as Non-Performing Assets…
- **1998-01-01 — Civil Suits…**: IBHL filed civil suits against the Borrower Entities and the Corporate Debtor in 1998 and…

## 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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