Limitation in insolvency proceedings upheld where default date and debt acknowledgment kept the Section 7 filing within time.

A Section 7 insolvency application was analysed on limitation, with the default date stated as 07.06.2016 and the filing made on 04.06.2019, bringing it within the three-year period under Article 137 of the Limitation Act, 1963. The record also contained a debt acknowledgment dated 19.11.2018 signed by two directors, and the objections raised against that document were found insufficient to displace the Adjudicating Authority's finding. On that basis, the limitation objection was rejected and the admission order was sustained.

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Issues: Whether the Section 7 insolvency application was within limitation and whether the alleged acknowledgment of debt extended the period of limitation.

Analysis: The date of default was recorded as 07.06.2016 in the Section 7 application, and the debtor's reply also ed that the account was declared NPA on that date. The application filed on 04.06.2019 was therefore within the three-year limitation period under Article 137 of the Limitation Act, 1963. In any event, the record contained an acknowledgment of debt dated 19.11.2018 signed by two directors, and the objections to that document were not found sufficient to dislodge the finding of the Adjudicating Authority. The limitation objection was thus rejected.

Conclusion: The Section 7 application was held to be within limitation, and the admission order was sustained.

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