Limitation in personal insolvency can extend through later acknowledgements of liability, with COVID exclusion keeping petitions timely.

Limitation for personal insolvency proceedings under the Insolvency and Bankruptcy Code is not rigidly fixed by the date of default stated in the petition; later acknowledgements of liability, including insolvency admissions and balance-sheet entries, may extend the limitation period. A subsequent demand notice did not negate the crystallised liability for insolvency purposes, and additional relevant documents could be considered on appeal where genuineness was undisputed. Applying the Supreme Court's COVID-19 exclusion period from 15.03.2020 to 28.02.2022, petitions filed in late 2022 were within time. The limitation objection therefore failed and the insolvency petitions were allowed to proceed on merits.

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Issues: (i) Whether limitation for initiating personal insolvency proceedings under Section 95 of the Insolvency and Bankruptcy Code, 2016 had to be reckoned only from the date stated as default in the petition, or could be computed from later events constituting acknowledgement of liability; (ii) Whether the petitions filed in November and December 2022 were within limitation after excluding the period covered by the Supreme Court's COVID-19 limitation orders.

Issue (i): Whether limitation for initiating personal insolvency proceedings under Section 95 of the Insolvency and Bankruptcy Code, 2016 had to be reckoned only from the date stated as default in the petition, or could be computed from later events constituting acknowledgement of liability.

Analysis: The date of default stated in the petition was treated as only one factual element of the cause for action and not as an inflexible date for computing limitation. Subsequent events, including the principal borrower's insolvency petition admitting liability and the later balance-sheet acknowledgment, constituted acknowledgements capable of extending limitation. The second notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 did not undo the earlier demand or the crystallised liability for the purpose of insolvency proceedings. The Tribunal also held that additional documents could be considered at the appellate stage where genuineness was not disputed and they were relevant to the result.

Conclusion: Limitation was not confined to the date of default pleaded in the petition, and the later acknowledgements validly shifted the commencement of limitation.

Issue (ii): Whether the petitions filed in November and December 2022 were within limitation after excluding the period covered by the Supreme Court's COVID-19 limitation orders.

Analysis: Once limitation was computed from the later acknowledgement of liability, the period between 15.03.2020 and 28.02.2022 stood excluded under the Supreme Court's suo motu limitation orders. Applying that exclusion, the petitions filed in late 2022 fell within the available limitation period. The Adjudicating Authority erred in computing limitation from the OTS acceptance date and in not giving effect to the full exclusion period.

Conclusion: The petitions were within limitation and were not time-barred.

Final Conclusion: The limitation objection failed, and the insolvency petitions against the personal guarantors were liable to proceed on merits.

Ratio Decidendi: For proceedings under the Insolvency and Bankruptcy Code, the date of default pleaded in the prescribed form does not rigidly fix limitation; the tribunal may compute limitation from later acknowledgements or other legally relevant events, and the entire COVID-19 exclusion period must be given full effect while testing timeliness.

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