Acknowledgment of liability can revive limitation; Section 14 exclusion fails where prior SARFAESI measures were not before a wrong forum.

A written acknowledgment of liability made before expiry of limitation, including entries in a corporate debtor's balance sheet and valid one-time settlement proposals, gives rise to a fresh limitation period under Section 18 of the Limitation Act, 1963. On that basis, the insolvency application was treated as within time. Section 14 exclusion was unavailable because the creditor's measures under the SARFAESI Act were not proceedings prosecuted before a forum lacking jurisdiction. The notes therefore state that acknowledgment can revive limitation, while Section 14 applies only where prior proceedings were before a jurisdictionally incompetent forum.

---

---

Issues: (i) Whether the insolvency application was barred by limitation or saved by acknowledgments in the corporate debtor's balance sheet and one-time settlement proposals under the Limitation Act, 1963. (ii) Whether proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 attracted exclusion of time under Section 14 of the Limitation Act, 1963.

Issue (i): Whether the insolvency application was barred by limitation or saved by acknowledgments in the corporate debtor's balance sheet and one-time settlement proposals under the Limitation Act, 1963.

Analysis: The limitation period was counted from the date of default/NPA, but the corporate debtor's balance sheet for the year ending 31.03.2015 constituted a written acknowledgment of liability. That acknowledgment started a fresh period of limitation under Section 18 of the Limitation Act, 1963. The subsequent one-time settlement proposals dated 16.03.2017 and 01.01.2018 were also treated as acknowledgments made before expiry of the then-running period and therefore extended limitation further. On that basis, the insolvency petition filed on 22.01.2020 was within time. The challenge to reliance on additional documents was rejected in light of the settled position that such material may be considered if it shows acknowledgment within limitation.

Conclusion: The application was held to be within limitation and the objection that it was time-barred failed.

Issue (ii): Whether proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 attracted exclusion of time under Section 14 of the Limitation Act, 1963.

Analysis: Section 14 applies only where prior proceedings were prosecuted in a forum lacking jurisdiction. The creditor's measures under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 were taken by a secured creditor before a competent forum and could not be treated as proceedings before a forum without jurisdiction. Consequently, the preconditions for invoking Section 14 were absent.

Conclusion: No benefit under Section 14 of the Limitation Act, 1963 was available.

Final Conclusion: The insolvency admission was sustained, the appeal failed, and the resolution process was permitted to continue.

Ratio Decidendi: A written acknowledgment of liability made before expiry of limitation, including one in a balance sheet or a valid settlement proposal, gives rise to a fresh period of limitation under Section 18 of the Limitation Act, 1963, while Section 14 is unavailable where earlier proceedings were not prosecuted before a forum lacking jurisdiction.

---