# In the matter of Subhashri Bio-Energies Pvt. Ltd. IBA-203-2020

> NCLT judgment dated 2021-09-02. Citation: TCN-2021-NCLT-01210. Indian Overseas Bank filed an application under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 2 Sept 2021
- **Citation:** TCN-2021-NCLT-01210
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/subhashri-bio-energies-pvt-ltd-iba-203-2020-676bfdb4

## Summary

### Background

Indian Overseas Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s. Subhashri Bio Energies (P) Ltd, claiming a default of Rs.137,58,62,899.74. The Corporate Debtor contested the application, arguing it was barred by limitation, as the account was declared NPA on 30.07.2005, and the application was filed after a lapse of 14 years. The Financial Creditor argued that the Corporate Debtor acknowledged its liabilities through Revival Letters and correspondences, extending the period of limitation.

## Facts

Indian Overseas Bank (the Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s. Subhashri Bio Energies (P) Ltd (the Corporate Debtor). The Financial Creditor claimed that the Corporate Debtor had defaulted on a financial debt of Rs.137,58,62,899.74. The Corporate Debtor argued that the application was barred by limitation, as the account was declared NPA on 30.07.2005, and the application was filed after a lapse of 14 years. The Financial Creditor submitted that the Corporate Debtor had acknowledged its liabilities through Revival Letters and correspondences, extending the period of limitation. The Corporate Debtor had availed financial facilities

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## Issues and analysis

### Issue 1: Whether the present Application filed by the Financial Creditor under Section 7 of the IBC is …

**Ratio:** Section 18 of the Limitation Act, 1963, states that an acknowledgment of debt can extend

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**Reasoning:** The Tribunal reasoned that the Corporate Debtor had issued Revival Letters and

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**Interpretation:** The interpretation of Section 18 of the Limitation Act, 1963, and the Supreme

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**Application:** In this case, the Corporate Debtor had issued Revival Letters and

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## Parties

- **Judges:** R. Sucha…; Anil Ku…
- **Appellants:** Indian Overseas…
- **Respondents:** M/s. Subhashri…

## Timeline

- **2004-06-19 — First Financial…**: The Corporate Debtor availed the financial…
- **2005-07-30 — Account Decla…**: The date of NPA was backdated to comply with the prudential norms of the Reserve Bank of…

## 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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