# Indian Bank (erstwhile Allahabad Bank) vs. Jagdish Prasad Sarda

> SC judgment dated 2022-09-13. Citation: TCN-2022-SC-00024. The appeal challenges an order dated 2020-08-28 passed by the National Company Law Appellate…

- **Court:** SC
- **Order date:** 13 Sept 2022
- **Citation:** TCN-2022-SC-00024
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/indian-bank-erstwhile-allahabad-bank-vs-jagdish-prasad-sarda-5aaa3603

## Summary

### Background

The appeal challenges an order dated 2020-08-28 passed by the National Company Law Appellate Tribunal (NCLAT). The NCLAT's order allowed an appeal filed by the respondent, who was the former Managing Director of the company, against an order dated 2019-08-27 passed by the National Company Law Tribunal (NCLT). The NCLT's order was allowed by the NCLAT based on the reasoning that the non-performing asset was declared on 2015-12-29, while proceedings as a financial creditor under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) were initiated on 2018-12-31, which was beyond the three-year limitation period under Article 137 of the Limitation Act, 1963.

## Facts

The case involves an appeal against an order by the National Company Law Appellate Tribunal (NCLAT) which had overturned an order by the National Company Law Tribunal (NCLT). The NCLAT allowed an appeal by the former Managing Director of a company. The NCLAT's decision was based on the fact that the non-performing asset was declared on 2015-12-29, while insolvency proceedings under Section 7 of the IBC were initiated on 2018-12-31. The NCLAT determined that the proceedings were initiated beyond the three-year limitation period prescribed by Article 137 of the Limitation Act, 1963. The appellant argued that the company acknowledged the debt by paying Rs.49,50,000/- on 2016-12-19, which should be considered for calculating the limitation period. The Supreme Court

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## Issues and analysis

### Issue 1: Whether the order passed by the National Company …

**Ratio:** The Supreme Court relied on previous judgments, including Sesh Nath Singh & Anr. Vs.

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**Reasoning:** The Court found that the NCLAT's order was inconsistent with the established legal

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**Interpretation:** The Court interpreted Section 238A of the IBC and the phrase 'as far as may be'

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**Application:** The Court applied the ratio of previous judgments to the specific facts of the

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## Parties

- **Judges:** HEMANT…; Sudhanshu…
- **Appellants:** Indian Bank…
- **Respondents:** Jagdish Prasad…

## Timeline

- **2015-12-29 — Declaration of…**: The non-performing…
- **2016-12-19 — Acknowledgment…**: The company paid Rs.49,50,000/-,…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 6 — Persons who may initiate corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-6)

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