# In the matter of Central Bank of India Vs. Himmat Steel Foundry Ltd.,Company Appeal (AT) (Insolvency) No. 286 of 2022

> NCLAT judgment dated 2022-11-14. Citation: TCN-2022-NCLAT-00105. The Central Bank of India, acting as the Financial Creditor, initiated an appeal against the…

- **Court:** NCLAT
- **Order date:** 14 Nov 2022
- **Citation:** TCN-2022-NCLAT-00105
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/central-bank-of-india-vs-himmat-steel-foundry-ltdcompany-appeal-9fa019f7

## Summary

### Background

The Central Bank of India, acting as the Financial Creditor, initiated an appeal against the order passed by the National Company Law Tribunal (NCLT), Cuttack Bench, which had rejected the bank's application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, on the grounds that it was barred by limitation. The bank had extended credit facilities to Himmat Steel Foundry Limited, the Corporate Debtor, whose accounts were declared Non-Performing Assets (NPA) in 1994. A recovery suit was filed, and a decree was passed in favor of the bank by the Debt Recovery Tribunal (DRT) in 2000. The NCLT considered whether the Section 7 petition was filed within the limitation period, concluding it was not, as it was filed after the expiry of three years from the DRT

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## Facts

Central Bank of India extended credit facilities to Himmat Steel Foundry Limited, which were later classified as Non-Performing Assets (NPA) on October 1, 1994. The bank initiated recovery proceedings, resulting in a Debt Recovery Tribunal (DRT) decree on April 10, 2000, for Rs. 8,68,64,184.29. Another financial creditor, IDBI Bank, also obtained a DRT decree on July 26, 2004, for Rs. 8,97,47,340. The Corporate Debtor proposed a One Time Settlement (OTS) on August 7, 2006. The bank served a notice under Section 13(2) of the SARFAESI Act in 2002 and a possession notice on September 3, 2009. The Corporate Debtor submitted revised OTS proposals, and its financial statements for 2018-19 acknowledged the debt. On March 6, 2020, the bank filed a Section 7 application under

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## Issues and analysis

### Issue 1: Whether the application under Section …

**Ratio:** The limitation period for filing a Section 7 application under the IBC is governed by

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**Reasoning:** The Adjudicating Authority and the NCLAT reasoned that the limitation period began from

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**Interpretation:** The interpretation of Article 137 of the Limitation Act is crucial. The right

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**Application:** In this case, the DRT decree in favor of the Appellant was dated April 10,

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## Parties

- **Judges:** Ashok Bh…; Barun M…
- **Appellants:** Central Bank of…
- **Respondents:** Himmat Steel…
- **Advocates:** Abhijeet…; Akshat B…; +5 more

## Timeline

- **1994-10-01 — Account Decla…**: Accounts of Himmat Steel Foundry Limited declared as Non-Performing Assets by Central…
- **2000-04-10 — DRT Decr…**: Debt Recovery Tribunal passed decree in favour of Central Bank of India for Rs.…

## 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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