# In the matter of Shri PKP Spintex Mills Private Limited CP(IB)-159(CHE)2021

> NCLT judgment dated 2022-11-09. Citation: TCN-2022-NCLT-00501. The case involves an application filed by Asset Reconstruction Company (India) Limited (ARCIL),…

- **Court:** NCLT
- **Order date:** 9 Nov 2022
- **Citation:** TCN-2022-NCLT-00501
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shri-pkp-spintex-mills-private-limited-cpib-159che2021-a06fda35

## Summary

### Background

The case involves an application filed by Asset Reconstruction Company (India) Limited (ARCIL), the Financial Creditor, under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Shri PKP Spintex Mills Private Limited, the Corporate Debtor, to initiate the Corporate Insolvency Resolution Process (CIRP). The Corporate Debtor had availed financial facilities from State Bank of India, including a term loan of Rs 12 Crores in 2010 and Rs 1 Crore in 2011. The account was declared a Non-Performing Asset (NPA) on 01.12.2012. State Bank of Mysore assigned the debts to ARCIL on 30.09.2014. The Corporate Debtor approached ARCIL for settlement, but outstanding dues remained unpaid. The Respondent contended that the application was barred by limitation.

## Facts

Shri PKP Spintex Mills Private Limited (Corporate Debtor) availed financial facilities from State Bank of India, including a term loan of Rs 12 Crores in 2010 and Rs 1 Crore in 2011. To secure the loan, the Corporate Debtor executed various financial documents, including agreements of guarantee and hypothecation. The account was declared a Non-Performing Asset (NPA) on 01.12.2012. As of 30.06.2014, the amount of default was Rs.18,14,42,364. State Bank of Mysore assigned the debts to Asset Reconstruction Company (India) Limited (ARCIL) on 30.09.2014. The Corporate Debtor approached ARCIL for settlement and issued various letters acknowledging the liability. As of 12.02.2021, the outstanding dues were Rs 59,51,29,538. The Corporate Debtor argued that the application was

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor is barred by limitation under the …

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

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**Reasoning:** The Tribunal considered the various settlement offers made by the Corporate Debtor and

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

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**Application:** The Corporate Debtor's OTS proposals and acknowledgment of debt in their

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## Parties

- **Judges:** (RETD.) RAMALINGAM…; SAMEER…
- **Appellants:** Asset Reconstructi…
- **Respondents:** PKP Spintex Mills…

## Timeline

- **2010-01-01 — Corporate Debtor…**: The Corporate Debtor availed a Term Loan of Rs 12 Crores from State Bank of Mysore in…
- **2011-01-01 — Corporate Debtor…**: The Corporate Debtor availed Rs 1 Crore…

## 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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