Acknowledgment of debt extended limitation for insolvency proceedings, sustaining admission of the Section 7 petition despite a belated challenge.

Repeated acknowledgment of debt within the limitation period extended time for initiating insolvency proceedings, so the Section 7 application was not time-barred. The record included an agreement, compromise and one-time settlement materials, and later correspondence and proceedings, all reflecting continuing acknowledgment of the bank's dues and default under the settlement terms. The corporate debtor did not raise a limitation objection before the Adjudicating Authority, and the challenge based on non-payment after 2015 did not override the contemporaneous acknowledgments. The admission of the insolvency petition was therefore sustained, and the CIRP-related directions were maintained.

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Issues: Whether the Section 7 application was barred by limitation, and whether the admission of the insolvency petition could be sustained in view of repeated acknowledgments of debt and the one-time settlement record.

Analysis: The record showed an agreement and subsequent compromise/OTS materials containing acknowledgment of the bank's dues, followed by further acknowledgments within three years through later correspondence and proceedings. The corporate debtor had not raised a limitation objection before the Adjudicating Authority, and the materials on record disclosed continuing acknowledgment of liability sufficient to extend limitation. The appellant's challenge based on absence of payment after 2015 did not displace the contemporaneous acknowledgments or the concluded default under the OTS terms.

Conclusion: The Section 7 application was not time-barred, and the admission of the insolvency petition was correctly sustained.

Final Conclusion: The appeal failed on the limitation challenge, the initiation of CIRP was upheld, and consequential directions for handing over possession and continuation of CIRP were maintained.

Ratio Decidendi: Repeated acknowledgment of debt within the limitation period extends the period of limitation for initiating insolvency proceedings, and a limitation plea not raised by the corporate debtor cannot defeat a Section 7 application when the record otherwise discloses continuing acknowledgment and default.

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