Acknowledgment of liability extends limitation under insolvency law, keeping the Section 7 application within time.

Proceedings under the Insolvency and Bankruptcy Code are subject to the Limitation Act through Section 238A, and a written acknowledgment of a subsisting liability signed before expiry of limitation can trigger a fresh limitation period under Section 18. On the stated facts, the corporate debtor issued a written acknowledgment of liability on 10.07.2018, and the limitation objection had already been raised and considered before the Adjudicating Authority. The application under Section 7 could therefore not be treated as time barred merely by reference to the original date of default or NPA, and the limitation objection failed.

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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 acknowledgment of liability dated 10.07.2018 could extend limitation under Section 18 of the Limitation Act, 1963.

Analysis: The proceedings under the Insolvency and Bankruptcy Code are subject to the Limitation Act to the extent applicable by virtue of Section 238A. Acknowledgment of a subsisting liability in writing and signed before expiry of the limitation period gives rise to a fresh period of limitation under Section 18 of the Limitation Act, 1963. The record showed that the corporate debtor had issued a written acknowledgment of liability on 10.07.2018 and that the issue of limitation had already been raised and considered before the Adjudicating Authority. The application therefore could not be treated as time barred merely on the basis of the original date of default or NPA.

Conclusion: The limitation objection failed, and the application under Section 7 was held to be within limitation.

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