One Time Settlement (OTS) proposal falls within the definition of 'acknowledgment of debt' under Section 18 of the Limitation Act, 1963.

Case Titte: Tejas Khandhar v Bank of Baroda

Citation: CA (AT) (INSOLVENCY) No. 371 of 2020

Order Date: 12-07-2022

 FACTS:

• On 08-10-2013, a loam recall Notice under Section 13(2) of the SARFAESI ACT, 2002 was issued by the financial creditor to the Corporate Debtor, demanding payment of Rs. 6,11,42,097/- 

• One-time settlement proposal dated 01-08-2016 was filed before the DRT, Pune by the Corporate Debtor which remained unaccepted

• subsequently, another OTS proposal dated 07-03-2018 was accepted by the financial creditor on 27-03-2018

• The Financial Creditor filed a petition under Section 7 of the Insolvency and Bankruptcy Act, 2016 seeking the initiation of CIRP against the Corporate Debtor.

• Further, the Financial Creditor had not raised the plea of extension of Limitation or Acknowledgement of Debt under Section 18 of Limitation Act, 1963 and therefore cannot agitate this plea at such a belated stage.

 ISSUE FOR CONSIDERATION:

Whether the One Time Settlement Proposal Is ‘Barred by Limitation’, At This Juncture?

DECISION OF THE TRIBUNAL:

It was observed by NCLAT that “a One Time Settlement Proposal Within the definition of Acknowledgement of debt under Section 18 of the Limitation Act, 1963.”

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