Acknowledgment of liability extends limitation and supports Section 7 insolvency admission where default is otherwise evidenced.

A valid acknowledgment of liability within the limitation period extends time under Section 18 of the Limitation Act, 1963, and the Section 7 insolvency application was therefore not time-barred. The Tribunal accepted an email and supporting letter in which the corporate debtor admitted outstanding dues and expressed an intention to repay, treating them as sufficient acknowledgment. The objection based on the absence of a record of default under Section 7(3)(b) of the Insolvency and Bankruptcy Code, 2016 also failed because the record otherwise showed sufficient material to establish default. The admission of the corporate insolvency resolution process was sustained.

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Issues: (i) Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation in view of the earlier default and later acknowledgment of liability; (ii) whether the absence of record of default under Section 7(3)(b) of the Insolvency and Bankruptcy Code, 2016 vitiated admission of the insolvency application.

Issue (i): Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation in view of the earlier default and later acknowledgment of liability.

Analysis: The record contained an email and a supporting letter dated in May 2016 in which the corporate debtor acknowledged the outstanding dues and expressed an intention to repay the amounts. The authenticity of the communication was accepted on the basis of the material produced before the Tribunal. Such acknowledgment brought the creditor within the benefit of Section 18 of the Limitation Act, 1963 and extended the limitation period.

Conclusion: The application was not barred by limitation.

Issue (ii): Whether the absence of record of default under Section 7(3)(b) of the Insolvency and Bankruptcy Code, 2016 vitiated admission of the insolvency application.

Analysis: The record before the Tribunal showed sufficient material to establish default. On that basis, the Adjudicating Authority had a proper foundation to admit the Section 7 application.

Conclusion: The objection based on Section 7(3)(b) failed.

Final Conclusion: The challenge to the admission of the corporate insolvency resolution process was unsuccessful, and the admission order was sustained.

Ratio Decidendi: A valid acknowledgment of liability within the limitation period extends time under Section 18 of the Limitation Act, 1963, and where default is otherwise evidenced on record, admission of a Section 7 insolvency application will not be interfered with.

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