# In the matter of Bil Energy Systems Limited CP (IB) 4058-MB-2019

> NCLT judgment dated 2022-12-09. Citation: TCN-2022-NCLT-00192. The case involves a petition filed by State Bank of India under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 9 Dec 2022
- **Citation:** TCN-2022-NCLT-00192
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/bil-energy-systems-limited-cp-ib-4058-mb-2019-bc43a540

## Summary

### Background

The case involves a petition filed by State Bank of India under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Bil Energy Systems Limited due to default in payment of a financial debt. The financial creditor claims that the corporate debtor failed to pay an outstanding financial debt of Rs. 1,67,27,51,707.86 as of 31.10.2019, with the date of default being 01.10.2012 and the date of Non-Performing Asset being 30.12.2012. The corporate debtor had approached the financial creditor in 2011 for financial assistance, which was sanctioned in the form of credit facilities. The corporate debtor raised the issue of limitation, arguing that the petition was filed beyond the 3-year limitation

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## Facts

State Bank of India filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP against Bil Energy Systems Limited. The financial creditor claimed a default of Rs. 1,67,27,51,707.86 as of 31.10.2019, with the default occurring on 01.10.2012 and the account becoming an NPA on 30.12.2012. The corporate debtor had approached the financial creditor for financial assistance in 2011, and credit facilities were sanctioned. The corporate debtor acknowledged the debt in financial statements and through a One Time Settlement (OTS) offer dated 30.09.2016. The corporate debtor argued that the petition was barred by limitation, as it was filed more than three years after the demand recall notice issued on 04.07.2014. The financial creditor

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## Issues and analysis

### Issue 1: Whether the Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 is maintainable on …

**Ratio:** Section 18 of the Limitation Act states that acknowledgment of debt in the balance sheet

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**Reasoning:** The court observed that the financial creditor had placed on record financial statements

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**Interpretation:** The acknowledgment of debt by the corporate debtor, both through financial

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**Application:** The court applied the principle that acknowledgment of debt extends the

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## Parties

- **Judges:** P.N. Des…; Shyam Babu…
- **Appellants:** State Bank of…
- **Respondents:** Bil Energy…

## Timeline

- **2011-01-01 — Corporate Debtor…**: The Corporate Debtor approached the…
- **2011-11-18 — Sanction Lette…**: The Financial Creditor issued a Sanction Letter dated 18.11.2011 sanctioning Credit…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(8) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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