NCLT admits insolvency application citing ₹8.42 crore default; petition held within limitation due to acknowledgment of debt via last repayment.
The National Company Law Tribunal (NCLT) has admitted an insolvency petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, involving a defaulted amount of ₹8.42 crore. The admission was based on the existence of a default and a valid acknowledgment of debt that reset the limitation period.
The operational creditor demonstrated that the last repayment was made on [date redacted], which was treated as an acknowledgment of debt under Section 18 of the Limitation Act, 1963. This acknowledgment revived the claim, rendering the petition timely under Article 137 of the Act, which prescribes a 3-year limitation period for insolvency applications.
The ruling reaffirms that part payments or written acknowledgments can extend the limitation period for initiating insolvency proceedings. Practitioners must meticulously verify dates of last transactions and ensure petitions are filed within the prescribed time, using financial receipts or correspondence as proof of acknowledgment where necessary.
Citations
- Insolvency and Bankruptcy Code, 2016, Section 7
- Limitation Act, 1963, Section 18
