# In the matter of T. Johnson VS Phoenix ARC Pvt. Ltd. & Anr. CA(AT)(Insolvency) 32-2019

> NCLAT judgment dated 2019-05-07. Citation: TCN-2019-NCLAT-00573. This appeal was filed by T. Johnson, the majority shareholder and erstwhile Managing Director…

- **Court:** NCLAT
- **Order date:** 7 May 2019
- **Citation:** TCN-2019-NCLAT-00573
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/t-johnson-vs-phoenix-arc-pvt-ltd-anr-ca-97700536

## Summary

### Background

This appeal was filed by T. Johnson, the majority shareholder and erstwhile Managing Director of St. John Freight System Limited (Corporate Debtor), challenging the legality and correctness of the order admitting the application filed by Phoenix ARC Pvt. Ltd. (Financial Creditor) under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Adjudicating Authority (National Company Law Tribunal), Division Bench Chennai, admitted the application, leading to a moratorium and the appointment of an Interim Resolution Professional. The appellant argued that the claim was time-barred and grossly exaggerated.

## Facts

St. John Freight System Limited (Corporate Debtor) obtained a secured loan from State Bank of Travancore (Bank) in 1999, totaling Rs. 59.35 Crores. The credit facility was renewed and enhanced over time. The Corporate Debtor's account was declared a Non-Performing Asset (NPA) by the Bank on September 30, 2015. The Bank assigned the account to Phoenix ARC Pvt. Ltd. (Financial Creditor) on March 31, 2016. According to a notice issued under Section 13(2) of the SARFAESI Act, 2002, the total amount of default as of November 30, 2016, was Rs. 60,92,44,653/-, which increased to Rs. 73,08,54,170/- by March 15, 2018, when the application for Corporate Insolvency Resolution Process was filed. The Corporate Debtor made a payment of Rs. 1.38 Crores to the Financial Creditor after

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## Issues and analysis

### Issue 1: Whether the impugned order can be sustained, considering the claim in the application was …

**Ratio:** The principle of limitation dictates that legal claims must be brought within a specified

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**Reasoning:** The court reasoned that the Corporate Debtor had executed a revival letter and a balance

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**Interpretation:** The interpretation of limitation laws requires considering acknowledgments of

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**Application:** In this case, the Corporate Debtor's actions of executing a revival letter, a

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## Parties

- **Judges:** Bansi Lal…; Balvinder…
- **Appellants:** T. Joh…
- **Respondents:** St. John Freight…; Phoenix ARC Pvt.…
- **Advocates:** Atul Sh…; S. C.…; +7 more

## Timeline

- **1999-01-01 — Loan Gra…**: State Bank of Travancore granted a secured loan to St. John Freight System Limited for…
- **2015-09-30 — Account Decla…**: The account of St. John Freight System Limited was declared a Non-Performing Asset (NPA)…

## 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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