Written acknowledgment extends limitation for insolvency claims when it confirms a subsisting liability before expiry.

An application under section 7 of the Insolvency and Bankruptcy Code was analysed on limitation, with the account having become an NPA in 2012 so that the ordinary three-year period under article 137 would have expired in 2015. The written agreement of 4 March 2015, later balance confirmation, and part-payments were treated as acknowledgments of a subsisting liability. Applying section 18 of the Limitation Act, a signed written acknowledgment before expiry of limitation creates a fresh period from the date of signature. The Tribunal reiterated that limitation can be extended only as provided by the Limitation Act and that a valid acknowledgment renews the remedy only for the acknowledged debt; the application was therefore treated as within limitation.

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Issues: Whether the application under section 7 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation, and whether acknowledgments in writing extended the period of limitation under section 18 of the Limitation Act, 1963.

Analysis: The account was classified as non-performing asset in 2012, so the three-year period under article 137 of the Limitation Act, 1963 would ordinarily expire in 2015. The record, however, contained subsequent written acknowledgments and part-payments, including the agreement of 4 March 2015 and the later balance confirmation, which were treated as acknowledgments of a subsisting liability. Under section 18 of the Limitation Act, 1963, a written acknowledgment signed before expiry of limitation gives rise to a fresh period of limitation from the date of signature. The Tribunal applied the settled principle that limitation can be extended only in the manner provided by the Limitation Act and that a valid acknowledgment renews the remedy only for the acknowledged subsisting liability.

Conclusion: The application under section 7 was held to be within limitation and not time-barred, and the appeals failed.

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