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Limitation act

(Querist) 27 February 2016 This query is : Resolved 
Respected experts,

we are the NBFC and we were accepting deposit and give loans to our clients.

The said NBFC went into the liquidations and few years back it was revived.

meanwhile official liquidator during the liquidation period had filed the recovery suit against the loanees, and got the order in his favour.

one among the loanee challenged before the High court telling that the loan taken by him is barred my limitation and he is not liable to pay the decreed amount against him. Court informed him to deposit the some amount if court wants to admit the said case accordingly it was paid, and accordingly he won the case Now the loanee is asking for the refund of his amount which was deposited before Official Liquidator.

My Question to experts:

As i said earlier, Now company got revived and amount deposited by the above said loanee is been withdrawn and now can we setoff the amount which is outstanding to the above loanee?
niranjan (Expert) 27 February 2016
You cannot as your loan is outdated.
Rajendra K Goyal (Expert) 28 February 2016
You have to write off the loan outstanding.
Anirudh (Expert) 28 February 2016
ABSOLUTELY NOT. YOU CANNOT DO IT, especially when the claim of the Company (as preferred by the Liquidator) stands dismissed by the Court of law as time-barred.
Neema (Expert) 28 February 2016
Section 3 of Act of 1963 only bars the remedy but does not destroy right which remedy relates to Right of debt continue to exist notwithstanding the remedy is barred by limitation - Creditor when he was in possession of an adequate security the debt due could be adjusted from the security in his possession and custody (AIR1992SC1815 PNB Vs Surendra prasad Sinha). So it can be set off.
Anirudh (Expert) 28 February 2016
The deposit has been done by the Party at the instance of the order of the Court. It was not the amount lying with the creditor which he can freely adjust against any debt. Therefore, I am of the strong view, the decision in PNB v. Surendra Prasad Sinha is hugely distinguishable and therefore inapplicable.

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