# In the matter of Jumbo Chemical & Allied Industries Pvt. Ltd. vs. Arjun Industries Limited

> NCLAT judgment dated 2023-09-18. Citation: TCN-2023-NCLAT-00196. The case involves an appeal against an order dated 06.06.2022 passed by the National Company…

- **Court:** NCLAT
- **Order date:** 18 Sept 2023
- **Citation:** TCN-2023-NCLAT-00196
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/jumbo-chemical-allied-industries-pvt-ltd-vs-arjun-industries-limited-9bc44713

## Summary

### Background

The case involves an appeal against an order dated 06.06.2022 passed by the National Company Law Tribunal (NCLT), New Delhi, Bench-II, which dismissed a Section 7 application filed by the appellant as barred by time. The appellant, Jumbo Chemical & Allied Industries Pvt Ltd, is the financial creditor. The corporate debtor, Arjun Industries Limited, was sanctioned a Rupee Term Loan by IDBI in 1996. IDBI also entered into a Foreign Currency Loan Agreement with the corporate debtor. After availing the credit facilities, the respondent company failed to make payments. IDBI filed an Original Application before the Debt Recovery Tribunal (DRT) for recovery of the amount. During the pendency of the OA, the corporate debtor offered a One-Time Settlement (OTS). The OTS was

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## Facts

Arjun Industries Limited (the Corporate Debtor) was sanctioned a Rupee Term Loan by the Industrial Development Bank of India (IDBI) on 11.09.1996 and IDBI disbursed Rs. 367 Lakhs. IDBI also entered into a Foreign Currency Loan Agreement with the Corporate Debtor sanctioning Rs. 183 Lakhs. After availing these credit facilities, the Corporate Debtor failed to make payments, leading IDBI to issue a legal notice on June 10, 1998. IDBI then filed Original Application No. 445/1998 before the Debt Recovery Tribunal (DRT), Delhi, seeking recovery of Rs. 6,19,93,815/- plus interest. During the pendency of the DRT proceedings, the Corporate Debtor offered IDBI a One-Time Settlement (OTS) of Rs. 225 Lakhs, later increased to Rs. 250 Lakhs, with Rs. 225 Lakhs to be paid by a

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## Issues and analysis

### Issue 1: Whether the Application filed by the …

**Ratio:** Section 18 of the Limitation Act, 1963 states that where, before the expiration of the

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**Reasoning:** The Adjudicating Authority rejected the Section 7 Application holding that after

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**Interpretation:** The interpretation of Section 18 of the Limitation Act, 1963, is central to the

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**Application:** The NCLAT examined the balance sheets of the Corporate Debtor from 1998-99 to

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## Parties

- **Judges:** Ashok Bh…; Barun M…
- **Appellants:** Jumbo Chemical &…
- **Respondents:** Arjun Industries…
- **Advocates:** Ramji Srin…; Arvind…; +8 more

## Timeline

- **1996-09-11 — Loan Sanc…**: IDBI sanctioned a Rupee Term Loan…
- **1998-06-10 — Legal No…**: IDBI issued a legal notice to Arjun…

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