# In the matter of Tottempudi Salaith & Ors. vs. State Bank of India & Ors.

> SC judgment dated 18 Oct 2023. Citation: TCN-2023-SC-00027. The appellant, managing director of Totem Infrastructures Limited (corporate debtor), challenged…

- **Court:** SC
- **Order date:** 18 Oct 2023
- **Citation:** TCN-2023-SC-00027
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/tottempudi-salaith-ors-vs-state-bank-of-india-ors-e9ed3d94

## Summary

### Background

The appellant, managing director of Totem Infrastructures Limited (corporate debtor), challenged the National Company Law Tribunal's (NCLT) decision to admit an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) and declare a moratorium. The NCLT's decision, dated January 12, 2021, was based on a default in repaying financial facilities extended by several banks, with a total claim of over Rs. 613 crores. The State Bank of India, as the financial creditor, filed the application, consolidating claims from various merged banks.

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## Facts

The appellant, managing director of Totem Infrastructures Limited (corporate debtor), faced insolvency proceedings initiated by the State Bank of India. The proceedings stemmed from the corporate debtor's default in repaying financial facilities, including loans and bank guarantees, extended by several banks. The total claim for default presented before the National Company Law Tribunal (NCLT) amounted to Rs. 613,27,01,598.23/-. The State Bank of India, as the first respondent, prosecuted the composite claims, which included those of banks that had merged with it on April 1, 2017, such as the State Bank of Hyderabad and State Bank of Mysore.

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## Issues and analysis

### Issue 1: Whether the application under Section 7…

**Ratio:** An acknowledgment of debt under Section 18 of the Limitation Act, 1963, must be made…

**Reasoning:** The Court reasoned that the NCLT and NCLAT erred in treating the corporate debtor's…

**Interpretation:** The Court interpreted **Section 18 of the Limitation Act, 1963**, strictly,…

**Application:** Applying this interpretation, the Court found that while the letter of January…

## Parties

- **Judges:** ANIRUDDHA…
- **Other parties:** supreme-court-of-i…

## Timeline

- **April 1, 2017 — Bank Mer…**: State Bank of Hyderabad, State Bank of Mysore, State Bank of Travancore, State Bank of…
- **August 4, 2017 — Recovery Certificate…**: A recovery certificate was issued by DRT for Rs.5,22,21,750/- in OA No.1930 of 2014…

## 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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