Limitation in Section 7 insolvency claims cannot be revived by SARFAESI proceedings or an invalid acknowledgment.

Limitation for a Section 7 insolvency application runs from default and is governed by the residuary period under Article 137. A debt already time-barred cannot be revived through the Insolvency and Bankruptcy Code, and pendency of SARFAESI proceedings does not, by itself, extend limitation for insolvency relief. An acknowledgment can save limitation only if it is written, signed, and made before expiry of the prescribed period under Section 18 of the Limitation Act; books of account alone are insufficient. On these principles, the section 7 application was held time-barred, the insolvency admission was set aside, and the corporate debtor was restored to its Board.

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Issues: (i) whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation; (ii) whether pendency of SARFAESI proceedings or alleged acknowledgments saved the Section 7 application from being time-barred.

Issue (i): whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation.

Analysis: The applicable limitation law governs applications under the Code. The account was classified as a non-performing asset on 1 December 2008, and the Section 7 application was filed much later. The Court applied the principle that the residuary limitation period under Article 137 governs such applications and that the Code cannot revive a debt already barred by time. The later proceedings under SARFAESI did not extend the limitation for the insolvency application.

Conclusion: The Section 7 application was barred by limitation and could not be maintained.

Issue (ii): whether pendency of SARFAESI proceedings or alleged acknowledgments saved the Section 7 application from being time-barred.

Analysis: Proceedings under the SARFAESI Act are independent and do not, by themselves, keep the insolvency remedy alive. An acknowledgment under Section 18 of the Limitation Act, 1963 must be in writing and signed by the party against whom the claim is made, and it must be made before expiry of the prescribed period. No such valid acknowledgment was brought on record, and books of account were not treated as sufficient acknowledgment.

Conclusion: Neither the SARFAESI proceedings nor the alleged acknowledgments saved limitation.

Final Conclusion: The insolvency admission was set aside, the corporate insolvency resolution process was annulled, and the corporate debtor was restored to management by its Board of Directors.

Ratio Decidendi: For a Section 7 application, limitation runs from default and cannot be revived by separate enforcement proceedings or by an unproved acknowledgment that does not satisfy Section 18 of the Limitation Act, 1963.

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