Limitation under IBC was extended by acknowledgements of debt, and proven financial debt and default led to admission of the petition.

Acknowledgement of liability in financial statements, annual reports, and a one-time settlement offer was treated as extending limitation, so the section 7 IBC petition was held within time and the limitation objection failed. The record also showed sanction and disbursal of credit facilities, non-payment of outstanding dues, and a complete application, so the debt was treated as a financial debt, default was established, and the corporate insolvency resolution process was initiated.

---

---

Issues: (i) Whether the petition under section 7 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation. (ii) Whether the requirements for admission of the petition, namely existence of financial debt and default, were satisfied.

Issue (i): Whether the petition under section 7 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation.

Analysis: The default was traced to the demand recall notice and the petition was filed in 2019. The financial statements and annual reports placed on record showed entries acknowledging the debt. The corporate debtor also had given an one-time settlement offer. Such acknowledgements were treated as extending limitation.

Conclusion: The petition was held to be within limitation and the objection of limitation was rejected.

Issue (ii): Whether the requirements for admission of the petition, namely existence of financial debt and default, were satisfied.

Analysis: The record showed sanction and disbursal of credit facilities and non-payment of the outstanding dues. The debt was treated as a financial debt and the non-payment constituted default. The application was also found to be complete.

Conclusion: The petition was admitted and corporate insolvency resolution process was initiated.

Final Conclusion: The insolvency application succeeded, the limitation defence failed, and insolvency proceedings were ordered against the corporate debtor.

Ratio Decidendi: Acknowledgement of liability in financial statements and settlement conduct can extend limitation, and once financial debt, default, and completeness of the application are established, a section 7 petition is to be admitted.

---