GAURAV HARGOVINDBHAI DAVEversusASSET RECONSTRUCTION COMPANY (INDIA) LTD. & ANR.

224                      [2019]REPORTS
               SUPREME COURT    13 S.C.R. 224               [2019] 13 S.C.R.


A                    GAURAV HARGOVINDBHAI DAVE
                                         v.
      ASSET RECONSTRUCTION COMPANY (INDIA) LTD. & ANR.
                         (Civil Appeal No. 4952 of 2019)
B                            SEPTEMBER 18, 2019
                  [R. F. NARIMAN, R. SUBHASH REDDY
                          AND SURYA KANT, JJ.]
            Limitation Act, 1963:
C            Articles 62 and 137 – Applicability of – To application u/s. 7
      of Insolvency and Bankruptcy Code – Admission of application
      u/s. 7 applying Art. 62 – Held: Art. 62 is applicable to only suits –
      An application u/s. 7 would fall within the residuary Art. 137 –
      Applying Art. 137, in the facts of the present case, application u/s.
      7 is time-barred – There is no equity about limitation – It is not open
D
      to the court to interpret Articles of Limitation Act, when applicability
      of a particular Article is clear.
            Allowing the appeal, the Court
            HELD: 1. Article 62 of the Limitation Act is out of the way,
E     on the ground that it would only apply to suits. The present case
      being “an application” which is filed under Section 7 of Insolvency
      and Bankruptcy Code, would fall only within the residuary article
      137. Time, therefore, begins to run on 21.07.2011, as a result of
      which the application filed under Section 7 would clearly be time-
      barred. [Para 6][227-A-B]
F
             2. The Report of the Insolvency Law Committee itself
      stated that the intent of the Insolvency and Bankruptcy Code
      could not have been to give a new lease of life to debts which are
      already time-barred. Further, it is not for the Court to interpret,
      commercially or otherwise, articles of the Limitation Act when it
G     is clear that a particular Article gets attracted. It is well settled
      that there is no equity about limitation - judgments have stated
      that often time periods provided by the Limitation Act can be
      arbitrary in nature. [Paras 6 and 7][227-C-D]

H
                                        224
 GAURAV HARGOVINDBHAI DAVE v. ASSET RECONSTRUCTION                          225
               COMPANY (INDIA) LTD.

      B.K.Educational Services Private Limited vs. Parag                    A
      Gupta and Associates, 2018 SCC OnLine SC 1921 –
      referred to.
                        Case Law Reference
(2018) SCC OnLine SC 1921              referred to         Para 4
                                                                            B
      CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4952
of 2019.
      From the Judgment and Order dated 02.05.2019 of the National
Company Law Appellate Tribunal, New Delhi in Company Appeal (AT)
(Insolvency) No.655 of 2018.                                                C
      Aditya Parolia, Piyush Singh, Akshay Srivastava and Gaurav Goel,
Advs. for the Appellant.
     Debal Banerjee, Sr. Adv., P. S. Sudheer, Rishi Maheshwari,
Mrs. Mayuri Nayyar Chawla, Ms. Anne Mathew, Bharat Sood and
Ms. Shruti Jose, Advs. for the Respondents.                                 D
      The Judgement of the Court was delivered by
      R. F. NARIMAN, J.
       1. In the present case, the Respondent No.2 was declared NPA
on 21.07.2011. At that point of time, the State Bank of India filed two     E
O.As in the Debt Recovery Tribunal in 2012 in order to recover a total
debt of 50 Crores of rupees. In the meanwhile, by an assignment dated
28.03.2014, the State Bank of India assigned the aforesaid debt to
Respondent No.1. The Debt Recovery Tribunal proceedings reached
judgment on 10.06.2016, the Tribunal holding that the O. As filed before
it were not maintainable for the reasons given therein.                     F

       2. As against the aforesaid judgment, Special Civil Application
Nos. 10621-10622 were filed before the Gujarat High Court which
resulted in the High Court remanding the aforesaid matter. From this
order, a Special Leave Petition was dismissed on 25.03.2017.
                                                                            G
       3. An independent proceeding was then begun by Respondent
No.1 on 03.10.2017 being in the form of a Section 7 application filed
under the Insolvency and Bankruptcy Code in order to recover the original
debt together with interest which now amounted to about 124 Crores of
rupees. In the Form-I that has statutorily to be annexed to the Section 7
                                                                            H
226            SUPREME COURT REPORTS                          [2019] 13 S.C.R.


A     application in Column II which was the date on which default occurred,
      the date of the NPA i.e. 21.07.2011 was filled up. The NCLT applied
      Article 62 of the Limitation Act which reads as follows:-


           Description of suit         Period of      Time from which
B                                      limitation     period begins to run
            To enforce payment of      Twelve          When the
            money secured by a         years           money sued
            mortgage or otherwise                      for becomes
            charged upon                               due
C           immovable property


             Applying the aforesaid Article, the NCLT reached the conclusion
      that since the limitation period was 12 years from the date on which the
      money suit has become due, the aforesaid claim was filed within limitation
D     and hence admitted the Section 7 application. The NCLAT vide the
      impugned judgment held, following its earlier judgments, that the time of
      limitation would begin running for the purposes of limitation only on and
      from 01.12.2016 which is the date on which the Insolvency and
      Bankruptcy Code was brought into force. Consequently, it dismissed the
      appeal.
E
             4. Mr. Aditya Parolia, learned counsel appearing on behalf of the
      appellant has argued that Article 137 being a residuary article would
      apply on the facts of this case, and as right to sue accrued only on and
      from 21.07.2011, three years having elapsed since then in 2014, the
      Section 7 application filed in 2017 is clearly out of time. He has also
F     referred to our judgment in B.K. Educational Services Private Limited
      vs. Parag Gupta and Associates, 2018 SCC OnLine SC 1921 in order
      to buttress his argument that it is Article 137 of the Limitation Act which
      will apply to the facts of this case.
             5. Mr. Debal Banerjee, learned Senior Counsel, appearing on
G     behalf of the respondents, countered this by stressing, in particular, para
      7 of the B.K. Educational Services Private Limited (supra) and
      reiterated the finding of the NCLT that it would be Article 62 of the
      Limitation Act that would be attracted to the facts of this case. He
      further argued that, being a commercial Code, a commercial interpretation
H     has to be given so as to make the Code workable.
 GAURAV HARGOVINDBHAI DAVE v. ASSET RECONSTRUCTION                               227
       COMPANY (INDIA) LTD. [R. F. NARIMAN, J.]

       6. Having heard the learned counsel for both sides, what is               A
apparent is that Article 62 is out of the way on the ground that it would
only apply to suits. The present case being “an application” which is
filed under Section 7, would fall only within the residuary article 137. As
rightly pointed out by learned counsel appearing on behalf of the appellant,
time, therefore, begins to run on 21.07.2011, as a result of which the
                                                                                 B
application filed under Section 7 would clearly be time-barred. So far as
Mr. Banerjee’s reliance on para 7 of B.K. Educational Services Private
Limited (supra), suffice it to say that the Report of the Insolvency Law
Committee itself stated that the intent of the Code could not have been
to give a new lease of life to debts which are already time-barred.
       7. This being the case, we fail to see how this para could possibly       C
help the case of the respondents. Further, it is not for us to interpret,
commercially or otherwise, articles of the Limitation Act when it is clear
that a particular article gets attracted. It is well settled that there is no
equity about limitation - judgments have stated that often time periods
provided by the Limitation Act can be arbitrary in nature.                       D
     8. This being the case, the appeal is allowed and the judgments of
the NCLT and NCLAT are set aside.


Kalpana K. Tripathy                                            Appeal allowed.
                                                                                 E




                                                                                 F




                                                                                 G




                                                                                 H