Acknowledgment of debt extends limitation for section 7 insolvency claims; challenge to admission was rejected.

Subsequent payments and other clear acknowledgments of debt extended limitation for the section 7 insolvency application under Article 137 of the Limitation Act, 1963. The record showed payments by the corporate debtor well beyond 2015, including a last payment on 23.02.2017, together with a later one-time settlement proposal, which amounted to acknowledgment of liability and preserved the subsisting debt for limitation purposes. As the application was filed on 31.01.2020, it was held to be within time. The limitation objection failed and the challenge to admission of the section 7 application was rejected.

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Issues: Whether the section 7 application was barred by limitation in view of the alleged date of default.

Analysis: The record showed payments made by the corporate debtor well beyond 2015, including a last payment on 23.02.2017, and a later proposal for one-time settlement. These acts constituted acknowledgment of the debt and supported the continuing subsistence of the liability for limitation purposes. The application filed on 31.01.2020 was therefore within the period prescribed under Article 137 of the Limitation Act, 1963.

Conclusion: The limitation objection failed and the challenge to admission of the section 7 application was rejected.

Final Conclusion: The appeal was dismissed as the application under section 7 was held to be within limitation on account of acknowledgment of debt and subsequent payments.

Ratio Decidendi: Subsequent payments and other clear acknowledgments of a debt extend limitation for a section 7 insolvency application, keeping the claim within time under Article 137 of the Limitation Act, 1963.

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