Section 7 insolvency filing, limitation, and settlement: authorised signatory and revived limitation supported admission despite proposed compromise.

An application under section 7 of the Insolvency and Bankruptcy Code was treated as validly filed where board resolutions and authority letters showed that the signatory was empowered to sign and present it for the financial creditors. Limitation was held to be saved by section 238A of the Code read with article 137 and sections 18 and 19 of the Limitation Act, with the period spent in statutory proceedings excluded and restructuring, part-payments and settlement events treated as giving rise to a fresh limitation period. A proposed settlement did not bar admission, as creditors could not be compelled to accept it once debt and default were established.

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Issues: (i) Whether the application under section 7 of the Insolvency and Bankruptcy Code, 2016 was validly instituted through a duly authorised signatory; (ii) Whether the application was barred by limitation in view of the restructuring, part-payments, the BIFR reference, and the settlement history; (iii) Whether the corporate debtor's proposed settlement warranted of CIRP or prevented admission of the petition.

Issue (i): Whether the application under section 7 of the Insolvency and Bankruptcy Code, 2016 was validly instituted through a duly authorised signatory.

Analysis: The authority letters and board resolutions showed that Ms. Anita Patole was empowered to sign, affirm, and file the application and connected pleadings on behalf of both financial creditors. The record also showed delegation of legal authority through the relevant corporate resolutions and notifications governing the successor entities.

Conclusion: The application was validly filed through a duly authorised person, and this objection failed.

Issue (ii): Whether the application was barred by limitation in view of the restructuring, part-payments, the BIFR reference, and the settlement history.

Analysis: The Tribunal applied section 238A of the Insolvency and Bankruptcy Code, 2016 with article 137 of the Limitation Act, 1963, and further considered sections 18 and 19 of the Limitation Act, 1963. It held that the pendency of proceedings under the Sick Industrial Companies (Special Provisions) Act, 1985 excluded the relevant period, and that the restructuring, subsequent payments, and settlement events gave rise to a fresh limitation period. On that basis, the petition was treated as within time.

Conclusion: The petition was within limitation and this objection failed.

Issue (iii): Whether the corporate debtor's proposed settlement warranted refusal of CIRP or prevented admission of the petition.

Analysis: The Tribunal considered the settlement proposal but held that it could not compel the financial creditors to accept a settlement. Since the debt and default were found to be established, the mere pendency or proposal of settlement did not defeat admission under section 7.

Conclusion: The proposed settlement did not preclude admission of the petition.

Final Conclusion: The petition was admitted, CIRP was commenced against the corporate debtor, an interim resolution professional was appointed, and moratorium under the Code was triggered.

Ratio Decidendi: For admission under section 7 of the Insolvency and Bankruptcy Code, 2016, the Tribunal must be satisfied that there is a financial debt and default, and limitation is computed in accordance with section 238A of the Code read with the Limitation Act, 1963, including exclusion of periods during which a statutory bar on proceedings operated.

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