Limitation for a s. 7 IBC application runs from the date of NPA/default, and admission of a claim by an IRP/RP does not constitute acknowledgment under s. 18 Limitation Act, 1963 so as to extend limitation

on

Facts
The appellant, erstwhile director of the corporate debtors, challenged admission of CIRP under s. 7 IBC. Loans sanctioned in 2014 by DHFL were declared NPA on 06.12.2016, marking default. DHFL itself underwent CIRP, culminating in approval of a resolution plan in favour of PCHFL (07.06.2021), which had earlier assigned the debt to the respondent creditor.

A first CIRP against the corporate debtor commenced on 23.12.2021 and continued till 29.07.2024, when it was terminated as fraudulently initiated. Thereafter, the respondent filed a fresh s. 7 IBC application on 23.09.2024. NCLT admitted it, and NCLAT affirmed, holding that RP’s admission of claim in the earlier CIRP (22.05.2022 and 21.01.2024) constituted acknowledgment extending limitation.

Issues Framed
(i) Whether limitation runs from 06.12.2016 or 06.12.2017?
(ii) Whether the s. 7 IBC application was within limitation?
(iii) Whether admission of debt by IRP/RP amounts to acknowledgment under s. 18 Limitation Act, 1963?

Court’s Reasoning

(a) Accrual of limitation under Art. 137 Limitation Act, 1963
The Court reaffirmed that limitation for s. 7 IBC applications is governed by Art. 137 Limitation Act, 1963, i.e., three years from when “the right to apply accrues.” It held that such right accrues on “the date of the default,” and specifically that “the limitation begins to run from the date of classification of the account as NPA” (Para 13). The respondent’s contention that limitation should commence after SARFAESI measures was rejected. The Court concluded that the relevant date is 06.12.2016 (NPA).

(b) Computation of limitation and exclusions
The Court acknowledged that the original limitation period (expiring 06.12.2019) was subject to statutory exclusions:
First, exclusion under s. 60(6) IBC during moratorium in CIRP proceedings;
Second, exclusion under this Court’s COVID orders (15.03.2020–28.02.2022 plus extension);
Third, pendency of CIRP against the corporate debtor (23.12.2021–29.07.2024).

However, applying these exclusions, the Court held that “only three days remain from 29.07.2024 which would expire on 01.08.2024” (Para 15). Since the application was filed on 23.09.2024, it was “well beyond the period of limitation.” Thus, even after all permissible exclusions, the claim was time-barred.

(c) Nature of acknowledgment under s. 18 Limitation Act, 1963
The Court restated the settled requirements: acknowledgment must be (i) by the debtor or authorised person, (ii) before expiry of limitation, and (iii) reflect a “conscious and unequivocal intention to admit a subsisting jural relationship and an existing liability” (Para 16). It emphasized that “a mere reference to a past transaction or a bald recital of a debt… would not suffice.”

(d) Role of RP/IRP and effect of claim admission
Relying on prior precedents, the Court held that the RP has “no adjudicatory powers” and merely performs “collation of claims” under s. 18 IBC. The Court observed that “admission of a claim by RP is merely an administrative/clerical task… [and] only means induction/entry of a claim” (Para 16). It concluded that such admission is “akin to mere recital/reference of debt” and therefore “does not amount to an acknowledgment under Section 18 of the 1963 Act.”

(e) Acknowledgment must be within limitation
The Court further clarified that acknowledgment “can only extend/renew a limitation period which has not already expired” (Para 17). Even otherwise, the RP’s admission (02.05.2022) occurred after expiry of limitation and hence could not revive the claim.

Held
The s. 7 IBC application filed on 23.09.2024 was barred by limitation. The judgments of NCLAT and NCLT were quashed; appeals allowed.

Ratio

For purposes of s. 7 IBC, limitation runs from the date of NPA/default, and admission of a claim by IRP/RP, being an administrative act, does not constitute acknowledgment under s. 18 Limitation Act, 1963 to extend or revive limitation.

Case Details
Citation: 2026 INSC 429
Decided on: 29 April 2026
Case Title: Shankar Khandelwal v. Omkara Asset Reconstruction Pvt. Ltd. & Anr.
Court: Supreme Court of India
Bench: Pamidighantam Sri Narasimha, J.; Alok Aradhe, J.