RP's Admission Of Claim In Earlier CIRP Amounts To Acknowledgement U/S 18 Limitation Act For Commencement Of Fresh Limitation Period: NCLAT

The NCLAT, Principal Bench, New Delhi, comprising Justice N. Seshasayee (Member-Judicial) and Arun Baroka (Member-Technical), has held that the admission of a financial creditor's claim by a resolution professional during an earlier CIRP amounts to an acknowledgement of debt within the meaning of section 18 of the Limitation Act. Therefore, the said acknowledgement gives the fresh period of limitation for initiating CIRP under IBC. Background of the Case DHFL had advanced two loans to the corporate debtor in the year 2014. Thereafter, in the year 2016, the corporate debtor's accounts were classified as NPA, and notices under section 13(2) of the SARFAESI Act were issued. When the DHFL underwent its own CIRP, the successful resolution applicant assigned the loans to Omkara ARC in 2023. Also, in the year 2021, the corporate debtor itself went into CIRP; however, that was later set aside in 2024. Later on, Omkara ARC filed a fresh section 7 petition before the NCLT, Jaipur, and the tribunal was pleased to admit the petition. The erstwhile director of the corporate debtor filed the present appeal against the impugned order. Contention of the Parties The appellant contended that the default occurred in 2016 and the limitation expired in the year 2019. They also argued that the admission of the claim by the RP in the prior CIRP cannot be taken as the acknowledgement, as the RP was not authorized to do that. Per contra, the respondent (Omkara ARC) argued that the date of default should be reckoned as February 7, 2017, i.e., 60 days after the Section 13(2) SARFAESI notice. And the moratorium period of both DHFL and the corporate debtor should be excluded under section 60(6) IBC. Respondent also argued that the RP's admission of claim in 2022 and 2024 amounted to acknowledgement under section 18 of the Limitation Act. Observations of the NCLAT The tribunal observed that the tribunals are duty-bound to examine the limitation as per section 3 of the Limitation Act even in the absence of any such plea raised by the parties. The bench discussed that though the initiation of CIRP is a class action remedy governed by Article 137 (three years), a secured creditor's right to make a claim for recovery based on mortgage remains governed by Article 62 (twelve years). Then, the bench observed that if the date of default is reckoned as 16.11.2016 or 23.11.2016, the SRA of the creditor has still made its claim before the IRP or the RP in the first CIRP against the corporate debtor within 12 years, which was not barred by limitation. The tribunal further observed that during the first CIRP, the entire management of the corporate debtor was vested with the IRP and RP, and they were statutorily authorized to admit the claim. It was also observed that in the absence of a board of directors, admission of a claim either by the IRP or the RP would amount to admission of a liability of the corporate debtor to repay the creditor. A mere choice of expression, such as 'acknowledgement' or 'admission,' used in different statutory schemes cannot alter the fundamentals. “Therefore, where an IRP or an RP has admitted a claim, it does constitute an acknowledgement under Sec. 18 of the Limitation Act,” the bench observed. The bench lastly observed that neither the ruling of the Dena Bank case [(2021)10 SCC 330] nor SBI vs. Krishindhan Seed Pvt., Ltd., discusses whether a claim of a secured creditor (mortgagee) that an IRP or the RP has admitted would constitute an acknowledgement within the meaning of Sec. 18 read with Article 62 of the Limitation Act, something that has visited this tribunal in this case. With the above observations, the tribunal dismissed the appeal. Case Name: Shankar Khandelwal Vs. Omkara Asset Reconstruction Pvt. Ltd. and Anr. Case No.: Company Appeal (AT) (Ins) No.293 of 2025 Coram: Justice N. Seshasayee (Member-Judicial) and Arun Baroka (Member-Technical Judgment: 15.10.2025Click Here To Read/Download The Order

RP's Admission Of Claim In Earlier CIRP Amounts To Acknowledgement U/S 18 Limitation Act For Commencement Of Fresh Limitation Period: NCLAT

Mohd.Rehan Ali

Tags