Acknowledgment of liability and distinct cause of action can revive limitation and support a second insolvency petition.

A payment made within the subsisting limitation period can constitute acknowledgment of liability and restart limitation under the Limitation Act; on that basis, the Section 7 application was treated as timely because the corporate debtor's December 2016 payments revived limitation from that date. A second Section 7 petition by the same financial creditor was also held maintainable where it was founded on a distinct debt, separate default and different factual matrix, so Order 2 Rule 2 of the Code of Civil Procedure did not bar it. The impugned order was set aside and the matter remitted for fresh consideration of the restored insolvency petition.

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Issues: (i) Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation in view of the alleged payments made in December 2016; (ii) Whether a second petition under Section 7 by the same financial creditor against the same corporate debtor was barred on the ground of maintainability.

Issue (i): Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation in view of the alleged payments made in December 2016.

Analysis: The accounts were declared non-performing on 31.03.2015, but the record showed payments of Rs. 2.65 crore by the corporate debtor in December 2016. Those payments were not denied and were treated as acknowledgment of liability within the subsisting limitation period. On that basis, the period of limitation restarted from December 2016 under the law governing acknowledgment, and the petition filed in 2018 was within three years.

Conclusion: The application was not barred by limitation and the finding of the Tribunal on this issue was erroneous.

Issue (ii): Whether a second petition under Section 7 by the same financial creditor against the same corporate debtor was barred on the ground of maintainability.

Analysis: The two petitions were founded on different debts, different factual settings, and different dates of default. In such circumstances, the mere fact that the same creditor was involved did not create a legal bar to a second petition. The objection based on Order 2 Rule 2 of the Code of Civil Procedure, 1908 was also rejected because the causes of action were distinct.

Conclusion: The second petition was maintainable and there was no legal impediment on that ground.

Final Conclusion: The impugned order was set aside and the matter was sent back to the Tribunal for fresh consideration of the restored insolvency petition.

Ratio Decidendi: A payment made within the limitation period can operate as acknowledgment of liability and restart limitation under the Limitation Act, and a second insolvency petition is not barred where it arises from a distinct debt and separate cause of action.

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