# In the matter of Abhishek Gupta Vs. Asset Reconstruction Company (India) Pvt. Ltd. Company Appeal (AT) (Insolvency) No. 1094 of 2021

> NCLAT judgment dated 2022-03-02. Citation: TCN-2022-NCLAT-00604. The appeal arises from an order dated 15.11.2021 passed by the Adjudicating Authority…

- **Court:** NCLAT
- **Order date:** 2 Mar 2022
- **Citation:** TCN-2022-NCLAT-00604
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/abhishek-gupta-vs-asset-reconstruction-company-a4c94499

## Summary

### Background

The appeal arises from an order dated 15.11.2021 passed by the Adjudicating Authority (National Company Law Tribunal, New Delhi) in CP (IB) No.393/ND/2021, which admitted a Section 7 application filed by Asset Reconstruction Company (India) Limited (ARCIL) and initiated the Corporate Insolvency Resolution Process (CIRP) against Uday Estates Private Limited. Uday Estates Private Limited received financial facilities from Bank of Baroda through two term loans. As the Corporate Debtor could not adhere to the schedule of payment as per the loan agreements, the account of the Corporate Debtor was declared as Non-Performing Asset (NPA) on 31.12.2011. Thereafter, the Bank of Baroda sent a demand notice dated 11.6.2012 under Section 13(2) of the SARFAESI Act, 2002 demanding

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## Facts

Uday Estates Private Limited received financial facilities from Bank of Baroda through two term loans: Term Loan I for Rs. 60 crores (agreement dated 28.7.2009) and Term Loan II for Rs. 13 crores (agreement dated 8.1.2011). The corporate debtor defaulted on payments, leading to the account being declared a Non-Performing Asset (NPA) on 31.12.2011. Bank of Baroda issued a demand notice on 11.6.2012 under Section 13(2) of the SARFAESI Act, demanding Rs. 79,93,84,596. On 13.3.2013, Bank of Baroda assigned the debt to Asset Reconstruction Company (India) Limited (ARCIL) under Section 5 of the SARFAESI Act. The Corporate Debtor filed an application under Section 17 of the SARFAESI Act before the Debt Recovery Tribunal (DRT), which directed the Corporate Debtor to pay dues

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## Issues and analysis

### Issue 1: Whether the Section 7 application filed by ARCIL was time-barred under the Insolvency and …

**Ratio:** The principle of extending the limitation period based on acknowledgment of debt, as

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**Reasoning:** The NCLAT reasoned that the Corporate Debtor's balance sheets for FY 2011-12 and FY

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**Interpretation:** The court interpreted Section 18 of the Limitation Act in conjunction with the

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**Application:** The court applied the principle of extended limitation to the facts of the

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## Parties

- **Judges:** Ashok Bh…; Alok Sriv…
- **Appellants:** Abhishek…
- **Respondents:** Uday Estates Pvt.…; Asset Reconstructi…

## Timeline

- **2009-07-28 — Term Loan I A…**: Uday Estates Private Limited received Term…
- **2011-01-08 — Term Loan II A…**: Uday Estates Private Limited received Term Loan…

## 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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