# Asset Reconstruction company (India) Ltd Vs. Tulip Star Hotels Ltd. & Ors. Civil Appeal 84-85 of 2020

> SC judgment dated 2022-08-01. Citation: TCN-2022-SC-00034. The appeals were filed under Section 62 of the Insolvency and Bankruptcy Code 2016 (IBC) by Asset…

- **Court:** SC
- **Order date:** 1 Aug 2022
- **Citation:** TCN-2022-SC-00034
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/asset-reconstruction-company-india-ltd-vs-tulip-star-hotels-ltd-ors-civil-appeal-beeb5b86

## Summary

### Background

The appeals were filed under Section 62 of the Insolvency and Bankruptcy Code 2016 (IBC) by Asset Reconstruction Company (India) Limited, the Financial Creditor, against a common judgment and final order dated 11th December 2019 passed by the National Company Law Appellate Tribunal (NCLAT). The NCLAT allowed Company Appeal (AT)(Insolvency) No.525 of 2019 and Company Appeal(AT)(Insolvency) No.627 of 2019, holding that the Corporate Insolvency Resolution Process (CIRP) initiated by the Appellant against the Corporate Debtor, V. Hotels Ltd., was barred by limitation. The loan agreement was executed in March 2002, and the account was classified as NPA in December 2008. The Appellant filed an application under Section 7(2) of the IBC in April 2018, which was admitted by the

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## Facts

1. A loan agreement was executed in March 2002 between a consortium of banks and V. Hotels Ltd. (Corporate Debtor).
2. The Corporate Debtor entered into an arrangement with Abu Dhabi Commercial Bank (ADCB) in June 2003 for repayment of the consortium loan.
3. A bank guarantee issued by Bank of India in favor of ADCB was invoked in August/September 2008.
4. The account of the Corporate Debtor was classified as NPA on December 1, 2008.
5. An assignment agreement was executed by Bank of India assigning its receivables to Asset Reconstruction Company (India) Limited (Appellant) on December 31, 2008.
6. The Corporate Debtor proposed a settlement in February 2011, offering to pay interest and a portion of the debt.
7. A Settlement Agreement was entered into in February 2011, with

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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:** The period of limitation for making an application under Section 7 of the IBC is three

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**Reasoning:** The court reasoned that the IBC is not merely a recovery mechanism but aims to revive

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**Interpretation:** The court interpreted Section 7 of the IBC and Section 18 of the Limitation Act

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**Application:** In this case, the court found that the Corporate Debtor had acknowledged its

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## Parties

- **Judges:** INDIRA BA…; J.K. MAHE…
- **Appellants:** Asset Reconstructi…
- **Respondents:** V Hotels…; Tulip Star Hotels…
- **Other parties:** 7th Edition…; Limitation…; +3 more

## Timeline

- **2002-03-08 — Loan Agre…**: A loan agreement was executed between a…
- **2003-06-05 — Arrangement w…**: The Corporate Debtor entered into an arrangement with Abu Dhabi Commercial Bank (ADCB)…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 62 — Appeal to Supreme Court](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-62)

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