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2026 Supreme(Online)(NCLAT) 521
NATIONAL COMPANY LAW APPELLATE TRIBUNAL
Sharad Kumar Sharma, Member (Judicial), Jatindranath Swain, Member (Technical)
Emgee Media Integrated Services Pvt. Ltd. – Appellant
Versus
Vyjayanthi Televentures Pvt. Ltd. – Respondent
Company Appeal (AT) (CH) (Ins) No.467/2023
For the Appellants/Petitioners:TK. Bhaskar, Advocate
For the Respondents: None
The court ruled that in computing limitation under Section 7 of the IBC, a valid acknowledgment under Section 18 of the Limitation Act extends the period, and a subsequent filing on the next working day is valid under Section 4 when the period expires on a holiday.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 7 - Limitation Act, 1963 - Sections 4 and 18 - NCLT Rules, 2016 - Rule 34 - CIRP - Application under Section 7 - Limitation - Effect of acknowledgment of debt - Interplay of Section 4 and Section 18 - Applicability of Section 4 when limitation period expires on a holiday - Filing on next working day is within limitation. (Paras 9, 10, 11, 12)
(B) Limitation Act, 1963 - Section 18 - Acknowledgment of debt - A written acknowledgment of liability, signed by the party, gives a fresh period of limitation - Such acknowledgment must be computed from the date it was signed - A plea that an acknowledgment was made “inadvertently” is not a valid defense unless proven. (Paras 9, 15 to 18)
(C) Insolvency and Bankruptcy Code, 2016 - Section 7(3) - Scope of - The requirement to provide a “record of default” from an information utility or such other record is not a strict proof at the admission stage - It is an enabling provision to establish a prima facie case and cannot be used as a tool to reject an application on merits. (Paras 26 to 30)
(D) NCLT Rules, 2016 - Rule 2(19) - “Pleadings” - Written submissions filed after conclusion of arguments are not part of the pleadings - New pleas, especially on limitation, cannot be raised for the first time in written submissions as they remain unrebutted. (Paras 31 to 33)
Facts of the case:
The Appellant, a Financial Creditor, filed an application under Section 7 of the I&B Code against the Respondent Corporate Debtor for a debt of Rs. 9,09,80,000/- taken as an unsecured loan. The Appellant claimed that on 09.06.2016, the Respondent sent a communication confirming the balance due, which was treated as an acknowledgment of debt under Section 18 of the Limitation Act. The application under Section 7 was filed on 10.06.2019. The Adjudicating Authority (NCLT) rejected the application, holding it to be barred by limitation by one day. The Appellant appealed, contending that the benefit of Section 4 of the Limitation Act should have been applied as the limitation period expired on a Saturday (08.06.2019) and Sunday (09.06.2019), which were holidays, making the filing on Monday (10.06.2019) valid.
Findings of Court:
The NCLAT held that the NCLT erred in rejecting the application. The court found that the acknowledgment of debt on 09.06.2016 was valid and not rebutted. The court applied Section 18 read with Section 4 of the Limitation Act, holding that since the three-year limitation period from 09.06.2016 expired on 08.06.2019 and 09.06.2019 were holidays (Saturday and Sunday), the application filed on 10.06.2019 was well within time. The court also held that the NCLT’s interpretation of Section 7(3) was too narrow and that the documents on record were sufficient to establish a prima facie case of debt and default. The appeal was allowed, the impugned order was quashed, and the Adjudicating Authority was directed to proceed with the CIRP.
Issues: The main issues were whether the application under Section 7 of I&B Code was barred by limitation, considering the interplay of Sections 4 and 18 of the Limitation Act, and whether the NCLT erred in treating a signed acknowledgment of debt as “inadvertent” and in its interpretation of Section 7(3) of the Code.
Ratio Decidendi: The court ruled that a valid acknowledgment of debt under Section 18 of the Limitation Act extends the limitation period, and the benefit of Section 4 of the same Act (extension of time when court is closed) must be applied when the limitation period expires on a holiday. The court also held that Section 7(3) of the I&B Code is not a rigid requirement for strict proof but an enabling provision for a prima facie case.
Result: Appeal allowed. Impugned order quashed. Respondent admitted to CIRP proceedings under Section 7 of the I&B Code. Adjudicating Authority directed to impose moratorium under Section 14 of the Code and proceed accordingly. (Paras 50 and 51)
ORDER
(Hybrid Mode)
20.04.2026:
Oral Judgment : Justice Sharad Kumar Sharma, Member (Judicial): The Appellant is an Applicant to the proceedings under Section 7 of I & B Code, 2016, which is to be read with Rule 34 of the NCLT Rules, 2016 , which they had initiated by preferring the same before the Ld. NCLT, Hyderabad Bench. The proceedings was ultimately registered as CP (IB) / 483 / 7 / HDB / 2019 and the same has been rejected by the impugned order of 22.05.2023 on the ground that the initiation of proceedings itself was barred by limitation. Aggrieved against the same, hence, the instant Company Appeal.
2. When the Company Appeal was instituted before this Tribunal on 06.07.2023, the same was taken up for arguments at admission stage on 19.01.2024, after permitting the rectification of defects, this Tribunal has issued notices to the Respondent on the Condone Delay Application.
There was an Office Report of 25.01.2024 that the Respondent had been served with the notices, but, none had appeared till date nor any Counter Affidavit has been filed.
3. Hence, in the light of the order passed by us on 19.07.2024, the matter was directed to be listed, awaiting appearance of the Respondent.
Consequently, we had to pass an order to serve the Respondent by substitutive mode of service as per Part VII of NCLAT Rules, 2016 , and in compliance thereto, an affidavit of service was filed by the Appellant informing thereof that the notices by way of publication as already been served and still the Respondent had not put an appearance. Hence, we directed the matter to proceed ex parte against the Respondent, in the light of the provisions contained under Rule 53 of the NCLAT Rules, 2016 .
4. Even none appears for the Respondent today.
Brief facts that engages consideration in the instant Company Appeal are that;
The Appellant claiming itself to be the Financial Creditor of M/s.
Vyjayanthi Televentures Private Limited, the Corporate Debtor herein, claims to have been incorporated on 11.06.2010, under the name and style of M/s. Emgee Media Integrated Services Private Limited, as per the provisions contained under the Companies Act, 1956. It is showed that the Appellant was engaged in a business of Media, Publishing, Printing and such other Allied Services.
5. The Appellant contends that it has advanced an Unsecured Loan of Rs.9,09,80,000/- to the Corporate Debtor, by virtue of series of transactions as would be reflected from the Ledger Accounts and the Balance Sheets of the Corporate Debtor (on record of Company Petition), which were maintained by it, wherein the amount was shown as to be an unsecured loan and with a remark that it has been shown has to be the borrowing.
6. The Financial Debt, occurred as per the Books of Account of the Appellant and the same became due and payable, as on 09.06.2016, owing to its confirmation of liability / debt made by the Respondent, which has been treated has to be an acknowledgement, wherein the Respondent had given an expression vide its communicating to the Appellant confirming the balance amount due to be paid observing thereof that an Unsecured Loan, as on 31.03.2016 had accrued, which as per Respondents stood confirmed by verification of the Books of Accounts and further, also affirmed that the said balance outstanding was shown in the Books of Accounts of the Corporate Debtor.
7. Its this unrebutted communication of 09.06.2016 that has been taken has to be the communication affirming the confirmation or an acknowledgement of debt payable by the Respondent.
This date of confirmation of the balance due, to be paid i.e. on 09.06.2016 is being taken up by the Appellant to be falling within the ambit of Section 18 of the Limitation Act.
Based upon the above short facts, the Ld. Tribunal while deciding the controversy have framed the following two major points for determination:
(a)Whether the debt claimed as due and payable by the Respondent to the Petitioner is barred by limitation; and (b)Whether the financial de
