# In the matter of Vashdeo R Bhojwani Vs. Abhyudaya Co-Operative Bank Ltd. & Anr. Civil Appeal No. 11020-2018

> SC judgment dated 2019-09-02. Citation: TCN-2019-SC-00033. The case involves a default of Rs. 6.7 Crores against respondent No.2. Respondent No.2 was declared…

- **Court:** SC
- **Order date:** 2 Sept 2019
- **Citation:** TCN-2019-SC-00033
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/vashdeo-r-bhojwani-vs-abhyudaya-co-operative-bank-ltd-anr-civil-appeal-no-11020-a9e9c4cc

## Summary

### Background

The case involves a default of Rs. 6.7 Crores against respondent No.2. Respondent No.2 was declared a Non-Performing Asset (NPA) by Abhyudaya Co-operative Bank Limited on 23.12.1999. A Recovery Certificate dated 24.12.2001 was issued. Respondent No.1 filed a Section 7 petition before the NCLT on 21.07.2017, claiming the amount with interest from 1998. The loan was originally assigned to Respondent No.2, and the respondent became a Financial Creditor after a merger in 2006. The Section 7 petition was admitted on 05.03.2018 by the NCLT.

## Facts

Respondent No. 2 defaulted on a loan of Rs. 6.7 Crores. Abhyudaya Co-operative Bank declared Respondent No. 2 an NPA on December 23, 1999. A Recovery Certificate was issued on December 24, 2001. Respondent No. 1 filed a Section 7 petition on July 21, 2017, before the NCLT, claiming the amount due with interest accruing from 1998. The loan was originally assigned to Respondent No. 2, and after a merger in 2006, the respondent became a Financial Creditor. The NCLT admitted the Section 7 petition on March 5, 2018. An appeal to the NCLAT was dismissed on September 5, 2018, stating the cause of action was continuing, and no limitation period applied. The Recovery Certificate of 2001 showed a default, and there was no statable defense. The key fact is the date of the

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## Issues and analysis

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

**Ratio:** Article 137 of the Limitation Act applies to applications filed under Sections 7 and 9 of

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**Reasoning:** The court reasoned that the Recovery Certificate dated 24.12.2001 injured the appellant's

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**Interpretation:** The court interpreted Article 137 of the Limitation Act to mean that the

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**Application:** The court applied the ratio to the facts by determining that the Recovery

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## Parties

- **Judges:** ROHINTON FALI…; SURYA…
- **Appellants:** VASHDEO R B…
- **Respondents:** Abhyudaya…

## Timeline

- **1999-12-23 — NPA Decla…**: Respondent No.2 declared NPA by…
- **2001-12-24 — Recovery Certificate…**: Recovery Certificate…

## 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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