Limitation, consortium consent and authority rules support a section 7 insolvency filing when debt acknowledgment and authorisation are established.

Acknowledgment of liability before expiry of limitation, including through balance-sheet disclosures, part-payments and restructuring communications, extended time under section 18 of the Limitation Act, so the section 7 insolvency application was not time-barred. The statutory scheme did not require prior consent of all consortium lenders before an individual financial creditor could file, and a contractual arrangement could not impose that extra condition; this objection failed. The record also showed valid internal authorisation for the signatory, so the filing was duly empowered and CIRP was directed to commence.

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Issues: (i) Whether the insolvency application was barred by limitation in view of the date of default and the alleged acknowledgments of debt. (ii) Whether consent of all consortium lenders was mandatory before filing the application under section 7 of the Insolvency and Bankruptcy Code, 2016. (iii) Whether the person who signed and filed the application had valid authority to do so.

Issue (i): Whether the insolvency application was barred by limitation in view of the date of default and the alleged acknowledgments of debt.

Analysis: The relevant date of default was examined along with the subsequent correspondence, balance-sheet disclosures, part-payments, restructuring proposals and other communications between the parties. These materials showed acknowledgment of the liability before expiry of the original limitation period. The entries in the balance sheet were treated as acknowledgment of an existing and continuing liability, and the conduct of the corporate debtor evidenced subsisting debt within limitation.

Conclusion: The application was not barred by limitation and the objection on this ground failed.

Issue (ii): Whether consent of all consortium lenders was mandatory before filing the application under section 7 of the Insolvency and Bankruptcy Code, 2016.

Analysis: The statutory scheme of sections 6 and 7, read with the definition of claim and the overriding effect of section 238, did not impose any requirement that all members of a lenders' consortium must consent before an individual financial creditor may file an application. The prescribed application form also contemplated filing by an individual financial creditor with its own authorisation. A contractual inter se arrangement among lenders could not add a statutory precondition.

Conclusion: Prior consent of all consortium lenders was not required and this objection failed.

Issue (iii): Whether the person who signed and filed the application had valid authority to do so.

Analysis: The documents placed on record, including the bank's internal authorisation and supporting materials, established that the signatory was duly empowered to file the application on behalf of the financial creditor. No legal infirmity in the authority was found.

Conclusion: The signatory had valid authority and this objection failed.

Final Conclusion: The application satisfied the requirements for initiation of corporate insolvency resolution process, the objections raised by the corporate debtor were rejected, and CIRP was ordered to commence with appointment of the proposed interim resolution professional.

Ratio Decidendi: For a section 7 insolvency application, acknowledgment of liability before expiry of limitation extends time under section 18 of the Limitation Act, 1963, and neither a consortium-consent condition nor a contractual restriction can override the statutory entitlement of an individual financial creditor to initiate CIRP when default is otherwise established.

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