Limitation under insolvency law can restart through acknowledgments and part-payments, while authorised filing and natural justice objections failed.

A section 7 insolvency application was examined on natural justice, authorisation and limitation. The challenge based on breach of natural justice failed because opportunities had been granted and no contemporaneous material showed that counsel was prevented from arguing. The filing was treated as duly authorised because a general power of attorney empowered the bank officer to commence and prosecute legal proceedings, and its execution before the Insolvency and Bankruptcy Code was held irrelevant. Limitation was governed by Article 137 of the Limitation Act, and acknowledgments of liability, debit balance confirmations and part-payments gave rise to a fresh period of limitation, making the application timely.

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Issues: (i) Whether the proceedings before the Adjudicating Authority suffered from breach of natural justice. (ii) Whether the person who signed and filed the section 7 application was duly authorised. (iii) Whether the section 7 application was barred by limitation.

Issue (i): Whether the proceedings before the Adjudicating Authority suffered from breach of natural justice.

Analysis: The record showed that the Adjudicating Authority had granted opportunities and proceeded only after noting that no one appeared for the respondents despite repeated calls. The objection was not supported by any contemporaneous application before the Adjudicating Authority showing that counsel was prevented from arguing. The challenge was therefore not substantiated on the materials placed before the Tribunal.

Conclusion: The plea of violation of natural justice was rejected.

Issue (ii): Whether the person who signed and filed the section 7 application was duly authorised.

Analysis: The application was signed by the bank's Chief Manager under a general power of attorney that conferred broad authority to commence, prosecute and defend legal proceedings before courts and tribunals. The objection that the power of attorney pre-dated the Insolvency and Bankruptcy Code was held to be irrelevant because the authority was not confined to any particular statute and covered legal proceedings generally.

Conclusion: The filing was held to be duly authorised.

Issue (iii): Whether the section 7 application was barred by limitation.

Analysis: The Tribunal applied Article 137 of the Limitation Act, 1963 to proceedings under section 7 of the Insolvency and Bankruptcy Code, 2016, and considered sections 18 and 19 of the Limitation Act, 1963. Although the account had been declared non-performing, the record contained a debit balance confirmation, subsequent account entries, acknowledgments of outstanding liability, and payments made even after the date of default. These materials were treated as acknowledgments and part-payments that gave rise to a fresh period of limitation, so the filing date fell within time.

Conclusion: The application was held to be within limitation.

Final Conclusion: No interference was called for with the admission order and the challenge to the initiation of the corporate insolvency resolution process failed in all material respects.

Ratio Decidendi: For a section 7 insolvency application, limitation is governed by Article 137 of the Limitation Act, 1963, and a fresh period may arise from a written acknowledgment of debt or part-payment made before expiry of the prescribed period.

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