Written acknowledgment extends limitation for insolvency claims, and borrower acknowledgments can bind the guarantor too.

A written acknowledgment of liability made before expiry of limitation extends time under section 18 of the Limitation Act, and article 137 applies to section 7 applications under the Insolvency and Bankruptcy Code. Revival correspondence and multiple OTS proposals were treated as acknowledgments, so the claim was not time-barred. Because a guarantor's liability is co-extensive with that of the principal borrower under section 128 of the Contract Act, the borrower's acknowledgments also operated against the guarantor. The limitation objection was rejected, the dismissal of the section 7 application was set aside, and the matter was remanded for fresh adjudication on merits.

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Issues: Whether the section 7 application was barred by limitation, and whether the OTS proposals and revival letter constituted acknowledgment of liability extending limitation against the corporate debtor and the guarantor.

Analysis: The default dates were not treated as conclusive in isolation, because the record showed a revival letter and a series of OTS proposals made before expiry of the limitation period. Acknowledgment in writing under section 18 of the Limitation Act, 1963 extends the period of limitation, and the residuary period under article 137 of the Limitation Act, 1963 applies to applications under section 7 of the Insolvency and Bankruptcy Code, 2016. The guarantor's liability was also treated as co-extensive with that of the principal borrower under section 128 of the Indian Contract Act, 1872, so acknowledgments by the borrower were held to operate against the guarantor as well. The adjudicating authority was found to have ignored several relevant OTS acknowledgments and to have erred in holding the claim time-barred.

Conclusion: The limitation objection was rejected, and the dismissal of the section 7 application was set aside.

Final Conclusion: The matter was remanded for fresh adjudication on merits after giving both sides an opportunity to be heard.

Ratio Decidendi: A written acknowledgment of liability made before expiry of limitation renews the limitation period, and where the debt is guaranteed, the guarantor is bound by the co-extensive liability arising from such acknowledgment.

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