Written acknowledgment of liability extends limitation for a section 7 insolvency application where debt and default are established.

A written acknowledgment of liability by the corporate debtor within the limitation period extended time for a section 7 insolvency application under section 18 of the Limitation Act. The Tribunal found that the debtor's correspondence and later financial statements showed continuing acknowledgment of the outstanding debt after assignment of the account, so the limitation objection failed. It also held that the financial creditor had established the existence of debt and default. The application was therefore admitted, triggering commencement of CIRP, moratorium, and appointment of an interim resolution professional.

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Issues: Whether the section 7 application was barred by limitation, and whether the financial creditor had established existing debt and default so as to warrant admission of the corporate insolvency resolution process.

Analysis: The account had been classified as non-performing asset in 2012, but the debt was assigned to the financial creditor in 2014 and the corporate debtor's subsequent correspondence, together with financial statements for later years, showed a continuing acknowledgment of liability. The Tribunal relied on the principle that acknowledgment in writing within the prescribed period attracts section 18 of the Limitation Act and gives rise to a fresh period of limitation for a section 7 application. On the record, the Tribunal found that the corporate debtor was aware of the assignment and had unconditionally acknowledged the outstanding liability, so the plea of limitation failed. The Tribunal also found that the financial creditor had established the existence of debt and default.

Conclusion: The section 7 petition was held to be within limitation and was admitted, with consequent commencement of CIRP, moratorium, and appointment of an interim resolution professional.

Final Conclusion: The application succeeded on merits, and insolvency proceedings against the corporate debtor were directed to proceed.

Ratio Decidendi: A written acknowledgment of liability by the corporate debtor within the limitation period extends limitation for a section 7 insolvency application under section 18 of the Limitation Act, enabling admission if debt and default are otherwise established.

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