Tribunal Upholds Timely Debt Application: Acknowledgment Extends Limitation Period for Corporate Resolution.

The Tribunal dismissed the appeal challenging the Section 7 application against the Corporate Debtor, ruling that the application was not barred by limitation. The Tribunal found that the Corporate Debtor had acknowledged the debt through payments made until February 2017, rendering the January 2020 application timely under Article 137 of the Limitation Act, 1961. Consequently, the order admitting the application and appointing an Interim Resolution Professional was upheld. This decision underscores the significance of debt acknowledgment in determining the limitation period for filing under relevant legal provisions.

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Issues involved:
The issue involves the determination of whether the application filed under Section 7 against the Corporate Debtor was barred by limitation.

Summary:
The Punjab National Bank (International) Ltd. filed an application under Section 7 against the Corporate Debtor for the resolution of a specified amount. The application was admitted, and an Interim Resolution Professional was appointed. An ex-director of the Corporate Debtor challenged the finding of the Adjudicating Authority on the ground that the application was barred by limitation.

The Appellant argued that the application was barred by limitation as the last payment was made in June 2015, and the application was filed in January 2020, exceeding the limitation period under Article 137 of the Limitation Act, 1961. The Respondent contended that various payments were made up to February 2017, and a proposal for a one-time settlement was sent in March 2019, constituting an acknowledgment of the debt.

After hearing both parties and examining the payment details, the Tribunal concluded that there was an acknowledgment of the debt by the Corporate Debtor through payments made until February 2017. Therefore, the application filed in January 2020 was within the limitation period, and the appeal challenging the order of admission on the ground of limitation was dismissed.

This judgment highlights the importance of acknowledging debt payments and their impact on the limitation period for filing applications under relevant sections of the law.

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