# In the matter of Sandeep Kumar Bhagat vs. Punjab National Bank Company Appeal (AT) (Insolvency) No. 1004 of 2019

> NCLAT judgment dated 2020-06-18. Citation: TCN-2020-NCLAT-00219. The appeal arises from an order dated 23rd August 2019, passed by the Adjudicating…

- **Court:** NCLAT
- **Order date:** 18 Jun 2020
- **Citation:** TCN-2020-NCLAT-00219
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/sandeep-kumar-bhagat-vs-punjab-national-bank-company-appeal-5ee5be7f

## Summary

### Background

The appeal arises from an order dated 23rd August 2019, passed by the Adjudicating Authority/National Company Law Tribunal, Guwahati Bench, which admitted an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Shree Sai Rolling Mills Private Limited. The appellant, the suspended director of the corporate debtor, challenged the admission order, arguing that the application was barred by limitation and that there was non-compliance with Section 7(5)(a) of the IBC. The respondent, Punjab National Bank, contended that the corporate debtor's account was classified as NPA on 31st March 2015, and the application was filed within the limitation period due to acknowledgements of debt by the corporate debtor. The appellant had also submitted a

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## Facts

Shree Sai Rolling Mills Private Limited, with Sandeep Kumar Bhagat as the suspended director, availed credit facilities of Rs 35.80 crore from Punjab National Bank between May 2005 and August 2014. The bank classified the account as NPA on March 31, 2015, due to financial indiscipline. The bank filed an application under Section 7 of the IBC before the NCLT, Guwahati Bench, claiming Rs 45,33,35,395.58. During the pendency of the petition, the bank entered into an OTS with the corporate debtor. However, the bank later revoked the OTS on July 31, 2019. The corporate debtor made a part payment of Rs 1 crore towards the OTS on August 19, 2019. The bank also accepted a sum of Rs. One Crore on 21st August 2019 regarding renewal of OTS. The NCLT admitted the application on

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## Issues and analysis

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

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

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**Reasoning:** The court reasoned that the corporate debtor had acknowledged the debt in writing before

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**Interpretation:** The interpretation of Section 18 of the Limitation Act is that any written

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**Application:** The court applied the ratio to the facts by noting that the corporate debtor

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## Parties

- **Judges:** Venugop…; V. P. S…; +1 more
- **Appellants:** Sandeep Kumar…
- **Respondents:** Shree Sai Rolling…; Punjab National…

## Timeline

- **2005-05-20 — Credit Facilities…**: Shree Sai Rolling Mills Private Limited availed credit facilities from Punjab National…
- **2014-08-29 — Credit Facilities…**: Shree Sai Rolling Mills Private Limited availed credit facilities from Punjab National…

## 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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