Limitation in insolvency claims turns on whether balance-sheet acknowledgments extend time and require fresh scrutiny after amendment.

An amended Section 7 IBC application that introduced balance-sheet entries said to acknowledge debt had to be reconsidered on limitation after amendment. The Tribunal held that whether those entries amounted to acknowledgment under Section 18 of the Limitation Act, and whether the application was within Article 137 limitation, required a merits-based examination by the Adjudicating Authority. The appellate order was set aside and the matter remanded for fresh consideration of the amended application on limitation and the alleged acknowledgments.

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Issues: Whether the amended application under Section 7 of the Insolvency and Bankruptcy Code, 2016, incorporating balance-sheet acknowledgments, required reconsideration by the Adjudicating Authority on the question of limitation.

Analysis: The amendment had been permitted to bring on record additional material said to show acknowledgment of debt through balance sheets. Once such material formed part of the record, the question whether the defaulted debt was acknowledged so as to extend limitation under Section 18 of the Limitation Act, 1963, and whether the application was within the period prescribed by Article 137 of the Limitation Act, 1963, had to be examined on merits. The Tribunal held that appreciation of the balance sheets and the effect of the alleged acknowledgments fell within the domain of the Adjudicating Authority and required a fresh look after amendment of the application.

Conclusion: The appeal was allowed, the impugned order was set aside, and the matter was remanded to the Adjudicating Authority to reconsider the amended Section 7 application on limitation and the alleged acknowledgments.

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