Application under Insolvency Code not time-barred; Debt acknowledgment extended limitation; Creditor evidence admitted; Appeal dismissed

The Tribunal held that the application under Section 7 of the Insolvency and Bankruptcy Code was not barred by limitation. The acknowledgment of debt by the Appellant through various letters extended the limitation period. The Adjudicating Authority properly admitted the application for Corporate Insolvency Resolution Process as the Financial Creditor provided evidence of the debt and default. The Tribunal dismissed the appeal, ruling that the application was timely and the Corporate Debtor had defaulted.

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Issues Involved:
1. Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation.
2. Whether the Corporate Debtor's acknowledgment of debt extended the limitation period.
3. Whether the adjudicating authority properly admitted the application for Corporate Insolvency Resolution Process (CIRP).

Summary:

1. Limitation Issue:
The Appellant contended that the claim under Section 7 of the Insolvency and Bankruptcy Code, 2016 (I & B Code) was barred by limitation, as the period of three years for filing the claim lapsed on 10.06.2009, while the application was filed on 29.02.2020. The Appellant argued that the default occurred on 11.06.2006, and the claim was time-barred.

2. Acknowledgment of Debt:
The Appellant acknowledged the debt through various "One Time Settlement" (OTS) proposals and acknowledgment letters dated 30.09.2007, 30.06.2008, 01.06.2011, 20.05.2014, and 11.05.2017. The Tribunal emphasized that an acknowledgment in writing extends the limitation period, as it indicates a jural relationship between the debtor and creditor. The Appellant's acknowledgment letters were within the limitation period, thus extending the limitation.

3. Adjudication by the Authority:
The Adjudicating Authority found that the Financial Creditor had provided evidence of a financial debt and default, which surpassed the threshold limit of Rs. 1 Crore. The Tribunal noted that the Corporate Debtor admitted its liability in its counter and through various communications. The Tribunal also referenced the Supreme Court's decision in Innoventive Industries Ltd. v. ICICI Bank, which held that once the adjudicating authority is satisfied that a default has occurred, the application must be admitted unless it is incomplete.

Conclusion:
The Tribunal concluded that the Section 7 application was within the period of limitation and that the Corporate Debtor had committed a default. The application for CIRP was rightly admitted by the Adjudicating Authority, and the appeal was dismissed with no costs. The connected pending interlocutory applications were also closed.

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