Written acknowledgment extends limitation for Section 7 insolvency claims and a withdrawn parallel claim does not bar admission.

A written acknowledgment of financial liability made before expiry of the limitation period extended the time to file a Section 7 insolvency application, because Section 18 of the Limitation Act gave rise to a fresh period from the date of acknowledgment. The objection that the application was time-barred failed, and the reliance on contrary precedents was rejected on facts because they did not involve a proved acknowledgment within limitation. The application was also held maintainable despite an earlier claim in the CIRP of the corporate debtor's parent company, since that claim had been withdrawn and no parallel claim survived. The application was admitted and CIRP was directed to commence.

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Issues: (i) Whether the Section 7 application was barred by limitation despite the Corporate Debtor's written acknowledgment of liability; (ii) Whether the application was not maintainable because the Financial Creditor had earlier filed a claim in the CIRP of the Corporate Debtor's parent company.

Issue (i): Whether the Section 7 application was barred by limitation despite the Corporate Debtor's written acknowledgment of liability.

Analysis: The limitation period for an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 is governed by Article 137 of the Limitation Act, 1963, and the right to apply accrues on default. The Corporate Debtor's account was declared NPA on 31.12.2015, but before expiry of the original limitation period, the Corporate Debtor issued a written acknowledgment of debt on 18.07.2017. The acknowledgment was treated as sufficient to attract Section 18 of the Limitation Act, 1963, thereby computing a fresh period of limitation from the date of acknowledgment. The precedents relied upon by the Corporate Debtor were distinguished on facts because they did not involve a proved written acknowledgment within the limitation period.

Conclusion: The Section 7 application was held to be within limitation and not barred on that ground.

Issue (ii): Whether the application was not maintainable because the Financial Creditor had earlier filed a claim in the CIRP of the Corporate Debtor's parent company.

Analysis: The earlier claim filed in the CIRP of the parent company had been withdrawn, and the IRP communicated acknowledgment of that withdrawal. The statutory scheme relating to withdrawal of an application under Section 12A of the Insolvency and Bankruptcy Code, 2016 was held not to govern withdrawal of a claim filed before the IRP in another CIRP. Since no claim remained pending, the objection based on forum shopping or dual claims did not survive.

Conclusion: The application was held maintainable notwithstanding the earlier claim in the parent company's CIRP.

Final Conclusion: The Corporate Debtor's default having been established, and the objections on limitation and maintainability having failed, the application was admitted and CIRP was directed to commence against the Corporate Debtor.

Ratio Decidendi: A written acknowledgment of financial liability made before expiry of the prescribed limitation period gives rise to a fresh limitation period for a Section 7 application under Section 18 of the Limitation Act, 1963, and a withdrawn claim in another CIRP does not bar admission of the application where no parallel claim survives.

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