Limitation for insolvency claims extends through written acknowledgment of debt, keeping a Section 7 application within time.

A Section 7 insolvency application is governed by Article 137 of the Limitation Act, so time runs from when the right to apply accrues. A written acknowledgment of liability made before expiry of limitation extends time under Section 18, and part-payments and related financial records may support that extension where they evidence continuing admission of debt. On the facts stated, multiple acknowledgments, including correspondence, settlement offers, part-payments and financial statements, with the acknowledgment dated 17 March 2015 treated as sufficient to extend limitation. The application was therefore not time-barred and the admission of the insolvency proceeding was sustained.

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Issues: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation in view of the alleged acknowledgments of debt and part-payments.

Analysis: The limitation period for an application under Section 7 is governed by Article 137 of the Limitation Act, 1963, and runs from the date when the right to apply accrues. An acknowledgment of liability in writing, if made before expiry of the prescribed period, gives rise to a fresh period of limitation under Section 18 of the Limitation Act, 1963. On the facts recorded, the corporate debtor had acknowledged the debt on multiple occasions, including in correspondence, settlement offers, part-payments, and financial statements, and the acknowledgement dated 17 March 2015 was sufficient to extend limitation.

Conclusion: The application under Section 7 was not barred by limitation and was rightly admitted.

Final Conclusion: The appeal failed, and the admission of the insolvency application was sustained.

Ratio Decidendi: A written acknowledgment of liability made within the limitation period extends limitation under Section 18 of the Limitation Act, 1963, and a Section 7 application under the Insolvency and Bankruptcy Code, 2016 is governed by Article 137 of the Limitation Act, 1963.

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