Limitation for Section 7 insolvency runs from NPA date, and mandatory financial disclosures do not revive debt.

For a Section 7 insolvency application, limitation ran from the date the account was classified as a non-performing asset, and proceedings before the DRT or steps under the SARFAESI Act did not extend or exclude time. Disclosure of the financial debt in a balance sheet or annual return also did not amount to acknowledgement under Section 18 of the Limitation Act because such filings were mandatory under the Companies Act. On that basis, the insolvency application was held time-barred, as no valid acknowledgement existed to revive or extend limitation.

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Issues: (i) Whether proceedings before the DRT or steps taken under the SARFAESI Act extended or excluded the period of limitation for a Section 7 insolvency application. (ii) Whether disclosure of the financial debt in the corporate debtor's balance sheet or annual return amounted to an acknowledgement under Section 18 of the Limitation Act, 1963.

Issue (i): Whether proceedings before the DRT or steps taken under the SARFAESI Act extended or excluded the period of limitation for a Section 7 insolvency application.

Analysis: The date of default was taken as the date on which the account was classified as a non-performing asset. On that basis, limitation under Article 137 of the Limitation Act, 1963 commenced from the date of NPA. Proceedings for recovery before the DRT and measures under the SARFAESI Act were not treated as proceedings that would extend limitation or justify exclusion of time for filing an application under Section 7 of the Insolvency and Bankruptcy Code, 2016.

Conclusion: The limitation period was not extended or excluded by the DRT or SARFAESI proceedings, and this issue was decided against the appellant.

Issue (ii): Whether disclosure of the financial debt in the corporate debtor's balance sheet or annual return amounted to an acknowledgement under Section 18 of the Limitation Act, 1963.

Analysis: The mandatory nature of filing balance sheets and annual returns under Section 92 of the Companies Act, 2013 was treated as inconsistent with treating such statutory filings as an acknowledgement of liability for the purpose of extending limitation. On that reasoning, reflection of the debt in the balance sheet or annual return did not amount to an acknowledgement that would revive or extend the limitation period.

Conclusion: Balance-sheet or annual-return disclosure did not constitute acknowledgement under Section 18 of the Limitation Act, 1963, and this issue was decided against the appellant.

Final Conclusion: The insolvency application was time-barred because the default date remained fixed at the NPA classification date and no valid acknowledgement existed to extend limitation.

Ratio Decidendi: For a Section 7 application, limitation runs from the date of default as reflected by NPA classification, and mandatory corporate financial disclosures do not by themselves amount to acknowledgement of debt under Section 18 of the Limitation Act, 1963.

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