Limitation under insolvency law: Section 7 applications require timely acknowledgment or effective extension, or they are time-barred.

Applications under Section 7 of the Insolvency and Bankruptcy Code are governed by Article 137 of the Limitation Act, 1963, and limitation is a mixed question of law and fact. Where the date of default was 05.11.2014 and the petition was filed on 30.08.2018, the material must show a valid acknowledgment or other legally effective extension within time. Later settlement proposals, SARFAESI and DRT proceedings, guarantor payments, and earlier recovery steps did not extend limitation on the facts recorded, and no timely acknowledgment by the corporate debtor was established. The application was therefore time-barred, and the admission order was set aside.

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Issues: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation.

Analysis: The limitation question was treated as a mixed question of law and fact. The date of default was 05.11.2014 and the application was filed on 30.08.2018. Article 137 of the Limitation Act, 1963 applies to applications under Sections 7 and 9 of the Insolvency and Bankruptcy Code, 2016. The Tribunal rejected the contention that the later settlement proposal, the SARFAESI and DRT proceedings, the guarantor's payment, or the earlier SARFAESI proceedings extended limitation. It held that there was no valid acknowledgment of debt within the prescribed period and that the material on record did not establish any timely acknowledgment by the corporate debtor.

Conclusion: The application under Section 7 was barred by limitation and could not sustain the admission order.

Final Conclusion: The admission of the insolvency petition was set aside, the corporate insolvency resolution process was terminated, and the matter was remitted only for determination of insolvency process costs and fees.

Ratio Decidendi: For applications under Section 7 of the Insolvency and Bankruptcy Code, 2016, limitation is governed by Article 137 of the Limitation Act, 1963, and unless there is a valid acknowledgment or other legally effective extension within the prescribed period, the application is time-barred.

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