# In the matter of K.R.V Uday Charan Rao Vs. Bank of India & Anr. CA(AT)(Insolvency)No.731 of 2019

> NCLAT judgment dated 2019-11-13. Citation: TCN-2019-NCLAT-00148. The 'M/s. Bank of India' (Financial Creditor) filed an application under Section 7 of the…

- **Court:** NCLAT
- **Order date:** 13 Nov 2019
- **Citation:** TCN-2019-NCLAT-00148
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/krv-uday-charan-rao-vs-bank-of-india-anr-ca-171562bc

## Summary

### Background

The 'M/s. Bank of India' (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, for initiating the Corporate Insolvency Resolution Process against 'M/s. Sainath Estates Private Limited' (Corporate Debtor). The Adjudicating Authority (National Company Law Tribunal), Hyderabad Bench, Hyderabad, admitted the application via an order dated 8th July, 2019. The appellant, representing the shareholder, argued that the application under Section 7 was barred by limitation. The respondent argued that the application was not barred by limitation because the corporate debtor acknowledged the debt through letters and part payments.

## Facts

M/s. Bank of India, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process against M/s. Sainath Estates Private Limited, the Corporate Debtor. The Adjudicating Authority (National Company Law Tribunal), Hyderabad Bench, admitted the application via an order dated 8th July, 2019. The Corporate Debtor availed a loan on 20th August, 2010, from the Financial Creditor. A notice was issued under Section 13(2) of the SARFAESI Act, 2002, but no action was taken against the Corporate Debtor. The Corporate Debtor allegedly had no option but to provide confirmation of debt on 5th March, 2018, which the appellant argued was in violation of Section 25 of the Indian

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016, is barred by …

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

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**Reasoning:** The court reasoned that the Corporate Debtor acknowledged the debt in various letters and

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

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**Application:** The court applied the ratio to the facts by examining the letters and financial

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## Parties

- **Judges:** S.J. Mukhop…; A.I.S. C…; +1 more
- **Appellants:** K.R.V. Uday…
- **Respondents:** M/s. Sainath…; Bank of…
- **Advocates:** Abhinav V…; Puneet…; +4 more

## Timeline

- **2010-08-20 — Loan Ava…**: The Corporate Debtor availed a…
- **2013-12-04 — Notice I…**: Notice issued under Section…

## 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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