Facts

• Kotak Mahindra Bank Limited(Appellant), was a Financial Creditor which provides banking and financial services.
• Kew Precision Parts Private Limited(Respondent), was a Corporate Debtor engaged in manufacturing tempo and tractor components.
• Appellant had extended financial facilities to Respondent from 2013 onwards. The Corporate Debtor defaulted on repayment obligations, resulting in the Financial Creditor declaring the account as a non-performing asset (NPA) on September 30, 2015.
• On November 19, 2017, Appellant – Financial Creditor issued a demand notice under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act). Subsequently, on December 12, 2018, the Respondent-Corporate Debtor admitted liability and proposed a one-time settlement, culminating in a dispute over the acknowledgement of debt and insolvency proceedings.
• The Corporate Debtor failed to pay the settlement amount, leading the financial creditor to file an application under Section 7 of the Insolvency Bankruptcy Code before the National Company Law Tribunal (NCLT) for Corporate Insolvency Resolution Process (CIRP) against the Respondent – corporate debtor.
• NCLT admitted the application and commenced CIRP against Corporate Debtor. Dissatisfied with NCLT's admission order, the suspended directors of Respondent- Corporate debtor appealed to NCLAT.
• NCLAT accepted the appeal by the suspended directors and ordered the termination of the CIRP against the Respondent – Corporate Debtor.
• Hence, the present appeal was filed by Appellant against the decision of NCLAT.
  

Background/ Procedural Posture

National Company Law Tribunal Holding

• Following the Corporate Debtor's default on the agreed one-time settlement (OTS) payment, the Financial Creditor filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC) to initiate a corporate insolvency resolution process (CIRP).
• The application was admitted by the National Company Law Tribunal (NCLT) on September 6, 2019, marking the commencement of the CIRP against the Corporate Debtor.
  
  

National Company Law Appellate Tribunal

• Dissatisfied with NCLT's admission order, the suspended directors of Respondent – Corporate debtor appealed to NCLAT.
• They argued that Appellant- Financial Creditor's Section 7 application was barred by limitation, as Respondent – Corporate Debtor had not acknowledged the debt within the stipulated three-year timeframe from the date of default (30th September 2015, when Appellant- Financial Creditor declared respondent – Corporate debtor’s account as NPA).
• NCLAT accepted the appeal by the suspended directors and ordered the termination of the CIRP against KPPPL.
• Aggrieved by the decision of NCLAT Appellant- Financial Creditor appealed to the Supreme Court against NCLAT's decision, seeking reinstatement of the CIRP against the Corporate Debtor, arguing the Section 7 application was not barred by limitation.
  
  

Main Issue:

1. Whether Appellant's application under Section 7 of the IBC to initiate CIRP against Respondent- Corporate Debtor was barred by limitation?
2. Whether the agreement between the Corporate Debtor and the Financial Creditor qualified under Section 25(3) of the Indian Contract Act, 1872?