Summary
The Supreme Court upheld rejection of an asset reconstruction company’s insolvency application as time-barred. Its pleaded default and the recovery certificate substantially preceded the application, and assignment or substitution in recovery proceedings did not save limitation. The balance sheet and settlement letter relied on later did not establish the timely acknowledgment claimed. Whether Section 18 applied to Section 7 applications generally was expressly left open. Existing DRT recovery proceedings remained available.
Issues
- Whether the pleaded default, recovery certificates and asserted acknowledgment materials established a timely insolvency application.
- Whether assignment and pending recovery proceedings prevented the limitation bar.
Provisions considered
- Article 137, Limitation Act, 1963The Court applied the three-year period to the insolvency application from accrual of the right to apply. Even the alternative recovery-certificate date relied on could not make this application timely. (¶¶ 18, 19, 20, 21, 23, 25, 36)
- Section 18, Limitation Act, 1963The Court examined the requirements of a signed acknowledgment before expiry of limitation and found the documents and pleadings insufficient. General applicability of the section to Section 7 IBC petitions was expressly not decided. (¶¶ 24, 25, 29, 30, 31, 32, 33, 34, 35)
Held
- The application itself specified the old NPA date as default and disclosed no material showing a timely claim. Even the recovery certificates invoked were too remote from filing to save this application on the record presented. (¶¶ 18, 19, 23, 25, 36)
- Assignment of the bank’s dues and substitution of the assignee in DRT execution did not itself preserve a fresh right to initiate CIRP without regard to limitation. (¶¶ 25, 36)
- The later balance sheet and letter were not pleaded or relied on in the original application as timely acknowledgments. Read in context, the documents disputed liability and did not supply the admissions claimed. The Court declined to decide the broader applicability of Section 18. (¶¶ 29, 30, 32, 33, 34, 35)
- The appellant retained the pending DRT execution remedy. IBC was not a substitute forum for recovery of this time-barred insolvency claim. (¶¶ 37, 38, 39)
Result
Appeal dismissed; rejection of the Section 7 application as barred by limitation upheld, without foreclosing the pending recovery proceedings.