Acknowledgment of debt through balance sheets and restructuring efforts extends limitation under Section 18 of the Limitation Act; thus, a Section 7 application under IBC remains valid even if initially perceived as time-barred.

JUDGMENT :

MANOJ MISRA, J.

1. This appeal, under Section 62 of the Insolvency and Bankruptcy Code, 2016¹[IBC], impugns judgment and order of the National Company Law Appellate Tribunal, Principal Bench at New Delhi²[NCLAT], dated 17.12.2021, passed in Company Appeal (AT) (Ins) No. 68 of 2019 and I.A. No. 1078 of 2021.

FACTS

2. A brief narration of facts in a chronological order would be apposite. The first respondent (State Bank of India³[SBI]), claiming itself to be the Financial Creditor⁴[FC] of M/s. Metal Closure Pvt. Ltd. (i.e., the Corporate Debtor⁵[CD]), filed an application under Section 7 ⁶[ Section 7 . Initiation of corporate insolvency resolution process by financial creditor. – (1) A financial creditor either by itself or jointly with other financial creditors, or any other person on behalf of the financial creditor, as may be notified by the Central Government, may file an application for initiating corporate insolvency resolution process against a corporate debtor before the Adjudicating Authority when a default has occurred.

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Explanation. --- For the purposes of this sub-section, a default includes a default in respect of a financial debt owed not only to the applicant financial creditor but to any other financial creditor of the corporate debtor.

(2) The financial creditor shall make an application under sub-section (1) in such form and manner and accompanied with such fee as may be prescribed.

(3) The financial creditor shall, along with the application furnish -

(a) record of the default recorded with the information utility or such other record or evidence of default as may be specified;

(b) the name of the resolution professional proposed to act as an interim resolution professional; and

(c) any other information as may be specified by the Board.

(4) The Adjudicating Authority shall, within 14 days of the receipt of the application under sub- section (2), ascertain the existence of default from the records of an information utility or on the basis of other evidence furnished by the financial creditor under sub-section (3):

Provided that if the Adjudicating Authority has not ascertained the existence of default and passed an order under sub-section (5) within such time, it shall record its reasons in writing for the same.

(5) Where the Adjudicating Authority is satisfied that -

(a) a default has occurred and the application under sub-section (2) is complete and there is no disciplinary proceedings pending against the proposed professional, it may, by order admit such application; or

(b) default has not occurred or the application under sub-section (2) is incomplete or any disciplinary proceeding is pending against the proposed resolution professional, it may, by order reject such application

Provided that the Adjudicating Authority shall, before rejecting the application under clause (b) of sub-section (5), give a notice to the applicant to rectify the defect in his application within seven days of receipt of such notice from the Adjudicating Authority.

(6) The corporate insolvency process shall commence from the date of admission of the application under sub-section (5).

(7) …xxxx..] of IBC on behalf of self and on behalf of a consortium of banks comprising SBI, Punjab National Bank⁷[PNB], Corporation Bank and UCO Bank against CD for initiating Corporate Insolvency Resolution Process⁸[CIRP], inter alia, alleging that CD is a defaulter of dues, exceeding Rs. 280 crores, payable against various credit facilities extended from time to time by member