Acknowledgment of debt can extend limitation in insolvency proceedings, and NPA declaration alone does not end the time limit.

Section 7 insolvency proceedings are governed by the Limitation Act through Section 238A of the Insolvency and Bankruptcy Code, and an acknowledgment of liability can extend the limitation period. The Supreme Court held that a prior declaration of non-performing asset did not by itself determine limitation; the relevant payment on 19.12.2016 constituted acknowledgment of debt, so limitation could not be computed only from the non-performing asset date. The appellate tribunal's limitation finding was set aside and the order of the National Company Law Tribunal was restored.

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Issues: Whether the financial creditor's application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation, or whether an acknowledgment of debt extended the limitation period.

Analysis: The earlier declaration of non-performing asset did not by itself conclude the limitation question. The Court applied the settled position that Section 238A of the Insolvency and Bankruptcy Code, 2016 makes the Limitation Act, 1963 applicable to proceedings under the Code, and that acknowledgment of liability can extend limitation under the Limitation Act. On the facts, payment made on 19.12.2016 was treated as acknowledgment of debt, so the computation of limitation could not be confined to the date of the non-performing asset declaration.

Conclusion: The appeal was allowed, the appellate tribunal's view on limitation was set aside, and the order of the National Company Law Tribunal was restored.

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