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Opportunity given by the court to amend pleadings on facts of case for being deficient and remiss: Supreme Court of India.

The appellant had been completely remiss and deficient in pleading acknowledgement of liability on the facts of this case, we afford one further opportunity to the appellant to amend its pleadings so as to incorporate what is stated in the written submissions filed by it before the NCLAT within a period of four weeks from today. This honorable judgement was passed by the Supreme Court of India in the case of Asset Reconstruction Company (India) vs. Bishal Jaiswal & Anr. [CIVIL APPEAL NO.323 OF 2021] by The Hon’ble Mr. Justice Rohinton Fali Nariman.

Corporate Power Ltd. set up a thermal power project in Jharkhand, and for so doing, availed of loan facilities from various lenders, including the State Bank of India. The account of the corporate debtor was declared as a non-performing asset by SBI, SBI issued a loan-recall notice to the corporate debtor in its capacity as the lenders, namely, India Infrastructure Finance Company Limited, SBI, State Bank of Hyderabad, State Bank of Bikaner and Jaipur, State Bank of Patiala, and State Bank of Travancore assigned the debts owed to them by the corporate debtor to the appellant, the Asset Reconstruction Company Limited. The appellant issued a notice under Section 13(2) of the 2002 SARFAESI Act on behalf of itself and other consortium lenders to the corporate debtor. The appellant took actual physical possession of the project assets of the corporate debtor under the SARFAESI Act. The appellant filed an application under Section 7 of IBC before the National Company Law Tribunal, Calcutta for a default amounting to Rs.5997,80,02,973/- from the corporate debtor. As the relevant form indicating the date of default did not indicate any such date, this was made 2up by the appellant on 08.11.2019 by filing a supplementary affidavit before the NCLT, specifically mentioning the date of default and annexing copies of balance sheets of the corporate debtor, which, according to the appellant, acknowledged periodically the debt that was due.

The court opinioned that, “This appeal is against the judgment dated 15.10.2020 of the Calcutta High Court which set aside two orders of the NCLT – (i) order whereby the NCLT admitted the appellant’s application under Section 7 of the IBC, and (ii) order, whereby the NCLT ordered liquidation of the corporate debtor.”

The court allowed the appeal stating that, “There can be no doubt that the NCLT had, in its order dated 19.08.2019, stated that Article 63(a) of the Limitation Act would apply instead of Article 137, contrary to what has been held by us in several judgments. It cannot, therefore, be said that the Calcutta High Court wrongly exercised jurisdiction in setting aside this finding. However, the High Court then went on to refer to certain balance sheets that had been produced, thereby extending limitation under Section 18 of the Limitation Act, but held that given the judgment in Babulal (supra), such balance sheets could not extend limitation.”

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