# Babulal Vardharji Gurjar Vs. Veer Gurjar Aluminium Industries Pvt. Ltd. & Anr., Civil Appeal No. 6347 of 2019

> SC judgment dated 2020-08-14. Citation: TCN-2020-SC-00046. This is an appeal to the Supreme Court of India against the judgment and order dated 14.05.2019…

- **Court:** SC
- **Order date:** 14 Aug 2020
- **Citation:** TCN-2020-SC-00046
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/babulal-vardharji-gurjar-vs-veer-gurjar-aluminium-industries-pvt-ltd-anr-civil-a-6e35e3fa

## Summary

### Background

This is an appeal to the Supreme Court of India against the judgment and order dated 14.05.2019 passed by the National Company Law Appellate Tribunal (NCLAT), New Delhi in Company Appeal (AT) Insolvency No. 549 of 2018. The NCLAT had rejected the contention that the application made by respondent No. 2 under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC), seeking initiation of Corporate Insolvency Resolution Process (CIRP) in respect of the debtor company (respondent No. 1), is barred by limitation. The appellant, Babulal Vardharji Gurjar, is challenging the NCLAT's order, arguing that the application under Section 7 of the IBC is time-barred.

## Facts

On 22.12.2007, Corporation Bank, Indian Overseas Bank and Bank of India sanctioned and extended various loans, advances and facilities to Veer Gurjar Aluminium Industries Pvt. Ltd. The corporate debtor executed various security documents in favor of the lender banks in the years 2008 and 2009, including those of equitable mortgage. On 27.08.2010, additional security documents were executed. The corporate debtor defaulted in payment, and its account with Corporation Bank was classified as Non-Performing Asset (NPA) on 08.07.2011, and with Indian Overseas Bank on 05.08.2011. On 15.11.2011, Indian Overseas Bank issued a demand notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (SARFAESI

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## Issues and analysis

### Issue 1: Whether the application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 is barred …

**Ratio:** The period of limitation for an application seeking initiation of CIRP under Section 7 of

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**Reasoning:** The Supreme Court relied on a series of its previous decisions, including B.K.

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**Interpretation:** The Court interpreted Section 238-A of the IBC, which makes the Limitation Act

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**Application:** In this case, the date of default was specifically stated in the application as

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## Parties

- **Judges:** DINESH MAHE…
- **Appellants:** Babulal Vardharji…
- **Respondents:** Veer Gurjar…
- **Other parties:** 7th Edition…; Limitation Act…; +9 more

## Timeline

- **2007-12-22 — Loan San…**: Corporation Bank, Indian Overseas Bank, and Bank of India sanctioned loans to Veer Gurjar…
- **2008-01-01 — Security Documents…**: Corporate debtor executed security documents, including equitable mortgage, in favor 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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