Acknowledgment of debt and assignment objections did not bar section 7 insolvency admission where liability was due and payable.

Prior judicial statements by the corporate debtor were treated as clear acknowledgment of debt, saving limitation under the Limitation Act, and were also regarded as a promise within section 25(3) of the Indian Contract Act, 1872. Objections to the deed of assignment based on insufficient stamp duty, absence of consent, and multiple parties were held irrelevant in a section 7 proceeding under the Insolvency and Bankruptcy Code, 2016. The debt was found due and payable because the cash credit facilities were payable on demand, the term loan had fallen due in instalments, and the bank guarantee created enforceable liability. The section 7 application was therefore maintainable, the corporate insolvency resolution process was admitted, moratorium followed, and an interim resolution professional was appointed.

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Issues: (i) whether the corporate debtor's statements before the High Court constituted acknowledgment of debt so as to save limitation; (ii) whether objections to the deed of assignment on the ground of insufficient stamp duty, absence of consent, and multiple parties could defeat the financial creditor's application under section 7 of the Insolvency and Bankruptcy Code, 2016; (iii) whether the debt was due and payable and the application under section 7 was maintainable for admission of corporate insolvency resolution process.

Issue (i): whether the corporate debtor's statements before the High Court constituted acknowledgment of debt so as to save limitation.

Analysis: The statements made in prior judicial proceedings were treated as binding admissions. The limitation question was examined with reference to the widest meaning of acknowledgment under the Limitation Act, and the application was also found to have been filed within three years from the recall notice. The Court further treated the statements as a promise within section 25(3) of the Indian Contract Act, 1872.

Conclusion: The statements constituted acknowledgment of debt and limitation was saved; the objection on limitation failed.

Issue (ii): whether objections to the deed of assignment on the ground of insufficient stamp duty, absence of consent, and multiple parties could defeat the financial creditor's application under section 7 of the Insolvency and Bankruptcy Code, 2016.

Analysis: The Court relied on the scheme and objects of the Insolvency and Bankruptcy Code, 2016, including the wide definition of claim and the overriding effect of the Code. It held that disputes relating to stamp duty, consent, and multiplicity of parties in the assignment deed were not germane to a section 7 proceeding.

Conclusion: The assignment-related objections did not bar the section 7 application and were rejected.

Issue (iii): whether the debt was due and payable and the application under section 7 was maintainable for admission of corporate insolvency resolution process.

Analysis: The Court found that the cash credit facilities were payable on demand, the working capital term loan had fallen due in instalments, and the bank guarantee obligations also created enforceable liability. On that basis, the debt was held to be due and payable notwithstanding the earlier challenge to the bank's measures.

Conclusion: The debt was due and payable, and the section 7 application was maintainable and admitted.

Final Conclusion: The corporate insolvency resolution process was initiated against the corporate debtor, the moratorium came into force, and an interim resolution professional was appointed.

Ratio Decidendi: A clear acknowledgment of debt made in prior judicial proceedings within the limitation period saves limitation under section 18 of the Limitation Act, 1963, and assignment objections of stamp duty or consent do not defeat a section 7 proceeding under the Insolvency and Bankruptcy Code, 2016 when the debt is otherwise due and payable.

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