Limitation in Section 7 insolvency claims turns on the date of default and a valid written acknowledgment.

A Section 7 insolvency application was treated as time-barred because limitation ran from the date the account was classified as a non-performing asset, which was taken as the date of default. The filing was beyond the three-year period under Article 137 of the Limitation Act, 1963. The stated acknowledgment in the master restructuring agreement did not extend limitation because the respondent had exited the restructuring framework, and the one-time settlement proposal was insufficient on the facts to revive the claim. The article states that an acknowledgment extends limitation only if it is in writing and made within the subsisting limitation period.

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Issues: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation and whether the alleged acknowledgment and one time settlement proposal extended the period of limitation.

Analysis: The date of default was taken as the date on which the account was classified as non-performing asset, which was 30 April 2013. The application was filed on 12 September 2018, beyond the three-year period prescribed by Article 137 of the Limitation Act, 1963. The asserted acknowledgment in the master restructuring agreement could not assist the applicant because the respondent had exited the restructuring framework, and the one time settlement proposal of 19 June 2015, even if treated as an acknowledgment, still did not bring the application within limitation. On the facts, there was no sufficient written acknowledgment extending limitation under Section 18 of the Limitation Act, 1963.

Conclusion: The application was barred by limitation and the challenge to its rejection failed.

Ratio Decidendi: For a Section 7 application, limitation runs from the date of default and an acknowledgment extends limitation only if it is in writing and within the subsisting limitation period.

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