Limitation extension by acknowledgment enabled admission of the insolvency petition filed within the available limitation period.

Whether the insolvency petition was time-barred turned on limitation principles: a recovery certificate was treated as triggering a fresh limitation period from its date; the period 15.03.2020-28.02.2022 was excluded by national suo moto orders, leaving limitation to run from 01.03.2022; audited financial-statement entries concerning guarantees and subsequent settlement correspondence were held to constitute clear acknowledgments of liability under the Limitation Act, thereby extending limitation. Outcome: the insolvency application filed 13.06.2024 was held within time and the admission order was upheld in favour of the respondent.

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Issues: Whether the Section 7 application filed by the Financial Creditor was barred by limitation.

Analysis: The Tribunal examined whether limitation was extended by (a) fresh period of limitation from the Recovery Certificate dated 26.07.2018, (b) exclusion of period by the Suo Moto orders of the Hon'ble Supreme Court, and (c) acknowledgments constituting extension under Section 18 of the Limitation Act as reflected in the audited financial statements and correspondence. The court applied settled principles that entries in balance sheets may constitute an acknowledgment of liability depending on context and tenor, and considered authoritative precedents holding that such entries require case-by-case scrutiny. The Recovery Certificate triggered a fresh three year limitation from 26.07.2018; the period falling within 15.03.2020 to 28.02.2022 was excluded under the Suo Moto order, making the balance of limitation available from 01.03.2022. The audited financial statements (notes regarding bank guarantees and counter guarantees) and the settlement correspondence dated 18.04.2022 and 02.06.2022 were held to be clear acknowledgments within the meaning of Section 18, thereby further extending limitation and rendering the Section 7 application filed on 13.06.2024 within time.

Conclusion: The Section 7 application was not barred by limitation; the impugned order admitting the Section 7 application is upheld. In favour of Respondent.

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