Shankar Khandelwal vs Omkara Asset Reconstruction Pvt. Ltd

CIVIL APPEAL NO(S). 13158-13159 OF 2025

SHANKAR KHANDELWAL ... APPELLANT

VERSUS OMKARA ASSET RECONSTRUCTION PVT. LTD & ANR. … RESPONDENTS

JUDGMENT

ALOK ARADHE, J.

1. These appeals under Section 62 of the Insolvency and Bankruptcy

Code, 2016 (hereinafter referred to as “the Code”), are directed

against the impugned judgment dated 15.10.2025 passed by the

National Company Law Appellate Tribunal (NCLAT), whereby the

order dated 22.01.2025 passed by the National Company Law

Tribunal (NCLT), admitting two separate petitions under Section 7 of

the Code and initiating the Corporate Insolvency Resolution Process

(CIRP), has been affirmed.

2. The central question that arises for determination in these appeals

are whether the application filed under Section 7 of the Code by the Signature Not Verified Digitally signed by KAPIL TANDON Date: 2026.04.29

secured financial creditor was within the period of limitation. 17:25:11 IST Reason:

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FACTS

3. The facts giving rise to the filing of these appeals, briefly stated, are

that the appellant is the erstwhile Director of Shrinathji Business

Ventures Private Limited and Samaria Business Ventures Private

Limited (Corporate Debtors). Two separate loans were sanctioned by

Dewan Housing Finance Corporation Ltd., (DHFL) in September 2014

for sums of Rs.12 crores and Rs.11 crores, out of which Rs.11.50

crores and Rs.11 crores respectively were disbursed. The corporate

debtors defaulted in repayment, and on 06.12.2016, DHFL classified

their accounts as Non-Performing Assets (NPA). Subsequently, DHFL

itself entered CIRP pursuant to proceedings initiated by the Reserve

Bank of India, and on 07.06.2021, a resolution plan submitted by

Piramal Capital & Housing Finance Ltd., (PCHFL) was approved by

the NCLT, Mumbai. On 10.01.2021, PCHFL assigned the subject

loans to Omkara Asset Reconstruction Pvt. Ltd., the secured financial

creditor.

4. Following the termination of the earlier CIRP, the secured financial

creditor filed an application under Section 7 of the Code on

23.09.2024 against the corporate debtor. By order dated 22.01.2025,

the NCLT held that the application was within limitation and

admitted the same.

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5. The appellant challenged the aforesaid order in appeal. By order

dated 15.10.2025, the NCLAT, inter alia, held that the admission of

the claim by the Resolution Professional (RP) in the first CIRP against

the corporate debtor on 22.05.2022 constituted a valid

acknowledgment, and its subsequent updating on 21.01.2024

constituted a second acknowledgment. It was further held that, if

limitation is computed from either of these dates, the debt is not time-

barred. Accordingly, the NCLAT concluded that the petition under

Section 7 of the Code was within limitation and affirmed the order of

the NCLT. In this factual background, the present appeals arise for

consideration.

SUBMISSIONS

6. Learned senior counsel for the appellant submitted that the date of

default of corporate debtor was 06.12.2016 and the limitation would

have expired on 06.12.2019. It is, however, submitted that the period

of limitation remained suspended from 03.12.2019 to 29.04.2024 in

view of mandate contained in Section 60(6) of the Code. However, the

period of limitation expired three days after 29.04.2024, whereas, the

petition under Section 7 of the Code was filed by the secured creditors

on 23.09.2024, and was thus barred by limitation.

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7. It is further contended that admission of debt by an Interim

Resolution Professional (IRP) cannot be equated with an

acknowledgment of liability under Section 18 of the Limitation Act,

1963 (hereinafter referred to as “the 1963 Act”). It is urged that the

admission of claims is merely an administrative function of the IRP

under Section 18 of the Code. It was argued that the IRP’s admission

of the secured financial creditor’s claim in the first CIRP does not

constitute an acknowledgment under Section 18 of the 1963 Act.

Accordingly, it is submitted that the application under Section 7 of

the Code was filed beyond the prescribed period of three years and is

barred by limitation. In support of the aforesaid submissions,

reliance was placed on the decisions of this Court1.

8. Learned senior counsel for the respondent no. 1, on the other hand,

submitted that the period of limitation would commence from

06.12.2017 i.e., upon expiry of the period prescribed under Section

13(2) read with Section 13(4) of Securitisation and Reconstruction of

1 Babulal Vardharji Gurjar v. Veer Gurjar, (2020) 15 SCC 1; Prabhakaran & Ors. v. M. Azhagiri Pillai (Dead) by LRs. & Ors., (2006) 4 SCC 484; Tilak Ram & Ors. v. Nathu & Ors., 1966 SCC OnLine SC 99; Valliamma Champaka Pillai v. Sivathanu Pillai & Ors., (1979) 4 SCC 429; Committee of Creditors of Essar Steel India Ltd. through authorised signatory v. Satish Kumar Gupta & Ors., (2020) 8 SCC 531; Ajay Kumar Radheyshyam Goenka v. Tourism Finance Corporation of India Ltd., (2023) 10 SCC 545; China Development Bank v. Doha Bank Q.P.S.C. & Ors., (2025) 7 SCC 729; Kotak Mahindra Bank Ltd. v. Kew Precision Parts Pvt. Ltd. & Ors., (2022) 9 SCC 364; Laxmi Pat Surana v. Union Bank of India & Anr., (2021) 8 SCC 481; Reliance Asset Reconstruction Co. Ltd. v. Hotel Poonja International Pvt. Ltd., (2021) 7 SCC 352; Hindalco Industries Ltd. v. Hirakud Industrial Works Ltd. & Ors., 2023 SCC OnLine NCLAT 1554 and Expert Realty Professionals Pvt. Ltd. through Neeraj Gusain v. Logix Infrastructure Pvt. Ltd. through RP Mr. Pawan Kumar Goyal & Ors., 2025 SCC OnLine NCLAT 1455

4 Financial Assets and Enforcement of Security Interest Act, 2002

(hereinafter referred to as “the SARFAESI Act, 2002”) expired. It is

further submitted that in view of the order passed by this Court2, the

period from 15.03.2020 to 28.02.2022, is excluded from computation

of limitation. It is pointed out that during the pendency of the first

CIRP on 02.05.2022, IRP acknowledged the debt. It is contended that

petition under Section 7 of the Code was within limitation. In support

of the aforesaid submissions, reliance was placed on the decisions of

this Court3.

9. We have considered the rival submissions and have perused the

records.

STATUTORY PROVISIONS

10. We take note of the relevant statutory provisions. Article 137 of the

1963 Act is extracted below for the facility of reference: -

DESCRIPTION PERIOD OF TIME FROM LIMITATION WHICH PERIOD BEGINS TO RUN Any other application for which Three years When the right no period of limitation is provided to apply elsewhere in this division. accrues. 2

Cognizance For Extension of Limitation, In Re; (2022) 3 SCC 117 3 New Delhi Municipal Council v. Minosha India Limited, (2022) 8 SCC 384; Laxmi Pat Surana (supra); Shantanu Jagdish Prakash v. SBI & Anr., 2025 SCC OnLine NCLAT 117; Mavjibhai Nagarbhai Patel v. SBI & Anr., 2024 SCC OnLine NCLAT 2014; R. Kandasamy (D) & Ors. v. T.R.K. Sarawathy & Anr., (2025) 3 SCC 513; S. Shivraj Reddy (D) thr. LRs. & Anr. v. S. Raghuraj Reddy & Ors., 2024 SCC OnLine SC 963; National Textile Corporation Ltd. v. Naresh Kumar Badrikumar Jagad & Ors., (2011) 12 SCC 695; Marg Ltd. v. Srei Equipment Finance Ltd. and Marg Ltd. v. Srei Equipment Finance Ltd., SCC OnLine Cal 7940 5 Section 60 of the Code deals with adjudicating authority for corporate

persons. Section 60(6) of the Code, which is relevant for the purposes

of the controversy involved in these appeals read as under: -

“Notwithstanding anything contained in the Limitation Act, 1963 (36 of 1963) or in any other law for the time being in force, in computing the period of limitation specified for any suit or application by or against a corporate debtor for which an order of moratorium has been made under this Part, the period during which such moratorium is in place shall be excluded.” ISSUES

11. The following issues arise for consideration in these appeals (i)

whether the period of limitation for filing the petition under Section

7 of the Code has to be reckoned from 06.12.2016 or 06.12.2017, (ii)

whether the petition under Section 7 of the Code is within limitation,

and (iii) whether an admission of debt by an IRP amounts to

acknowledgment of liability under Section 18 of the 1963 Act.

ANALYSIS

12. The relevant undisputed facts are reflected in the following

chronology of events:

Date Particulars 26.09.2014 Loan facility was sanctioned to the Corporate Debtors by DHFL. 06.12.2016 Loan Accounts of the Corporate Debtors were declared as an NPA.

6 06.02.2017 60 days as mandated under Section 13(4) of the SARFAESI Act, 2002, concluded. 03.12.2019 NCLAT admitted CIRP against DHFL 15.03.2020 Covid-19 extension of limitation period commenced. 07.06.2021 Resolution plan of PCHFL was approved by NCLT in CIRP of DHFL. 23.12.2021 NCLT admitted CIRP against the CD (first CIRP) and moratorium was imposed. 30.05.2022 Covid-19 extension of limitation period concludes. 10.01.2023 PCHFL assigned its debt of CD to Secured Financial Creditor. 29.07.2024 NCLT terminated first CIRP on the ground of fraudulent initiation of CIRP. 23.09.2024 The Secured Financial Creditor filed a petition under Section 7 of the Code.

13. It is well-settled in law that the limitation for filing an application

under Section 7 of the Code is three years and is governed by Article

137 of 1963 Act4. An application under Section 7 of the Code is

governed by Article 137 of the 1963 Act. The accrual of such right

has been consistently interpreted by this Court to arise on the date

of the default, that is, when the corporate debtor first fails to

discharge its repayment obligations. The limitation begins to run

from the date of classification of the account as NPA, being the date

of default, and not from any subsequent proceeding initiated for

4 Babulal Vardharji Gurjar (supra) 7 recovery5. In the instant case, it is not in dispute that accounts of the

CD were declared NPA on 06.12.2016. Therefore, the right to file a

petition under Section 7 of the Code accrued on 06.12.2016.

Accordingly, the first issue is answered in the aforesaid terms.

14. In the facts of the present case, the period of limitation for filing the

petition under Section 7 of the Code, commences from 06.12.2016.

The period of limitation would have expired on 06.12.2019. However,

following three events have intervened before filing of petition under

Section of the Code namely: -

(i) Commencement of CIRP of DHFL from 03.12.2019 to

07.06.2021 from which it is evident that CIRP went beyond

the expiry of three years period on 06.12.2019.

(ii) Before the expiry of the CIRP of DHFL, the Suo Motu Order of

this Court due to Covid Pandemic directed exclusion of

limitation period commencing from 15.03.2020 till

28.02.2022. Further, this limitation period is extended by

another 90 days from 01.03.2022.

5 BK Educational Services (P) Ltd. v. Paras Gupta & Associates, (2019) 11 SCC 633; Gaurav Hargovindbhai Dave v. Asset Reconstruction Company (India) Ltd. & Anr., (2019) 10 SCC 572; Babulal Vardharji Gurjar (supra) and Tech Sharp Engineers Pvt. Ltd. v. Sanghvi Movers Ltd., (2023) 2 SCC 531 8

(iii) Before expiry of extension of limitation by virtue of Suo Motu

order of this Court, CIRP as against the appellant itself

commenced on 23.12.2021 and continued till 29.07.2024.

15. After reckoning three years from 06.12.2016 and excluding the above

referred periods, only three days remain from 29.07.2024 which

would expire on 01.08.2024. However, petition under Section 7 was

filed on 23.09.2024 which is well beyond the period of limitation.

Accordingly, the second issue is answered.

16. The third issue pertains to legal character of the admission of a claim

by the IRP/RP and whether such admission can be construed as

admission of liability so as to extend the period of limitation under

Section 18 of the 1963 Act. At the outset, it must be noted that scope

and ambit of Section 18 of the 1963 Act are well-settled. For a writing

to constitute a valid acknowledgment, it must be made by the party

against whom the right is claimed, or by a person duly authorized on

its behalf; it must be made before the expiration of the prescribed

period of limitation; and, most importantly, it must evince a

conscious and unequivocal intention to admit a subsisting jural

relationship and an existing liability. A mere reference to a past

transaction or a bald recital of a debt, without an intention to admit

liability, would not suffice. The said principle has been

9 authoritatively enunciated by this Court6. The provisions of the Code

and the Regulations were considered by this Court7 and it has been

held that RP has no adjudicatory powers and his role involves

collation of claims. RP performs its administrative duties under

Section 18 of the Code. The admission of a claim by RP is merely an

administrative/clerical task performed as part of its statutory duties

under Section 18 of the Code8 and, therefore, admission of claim by

RP only means induction/entry of a claim. An admission of a claim

by RP is akin to mere recital/reference of debt, which does not

amount to an acknowledgment under Section 18 of the 1963 Act9.

Therefore, IRP’s admission of secured financial creditors debt in first

CIRP was not an acknowledgement under Section 18 of 1963 Act.

Accordingly, third issue is answered.

17. It is a well-settled legal proposition that an acknowledgment under

Section 18 of the 1963 Act can only extend/renew a limitation period

which has not already expired10. Therefore, a limitation period can be

extended only by an acknowledgment which is made within the

period of limitation. In any case, the admission of claim of secured

6 Prabhakaran (supra); Tilak Ram (supra) and Valliamma (supra) 7 Swiss Ribbons Private Limited & Anr. v. Union of India & Ors., (2019) 4 SCC 17 and Ajay Kumar Radheyshyam Goenka v. Tourism Finance Corporation of India Limited; (2023) 10 SCC 545 8 Committee of Creditors of Essar Steel India Ltd. through authorised signatory (supra) 9 Prabhakaran & Ors. (supra), Tilak Ram & Ors. (supra) and Valliamma Champaka Pillai (supra) 10 Kotak Mahindra Bank Ltd. (supra); Laxmi Pat Surana (supra); Reliance Asset Reconstruction Co. Ltd. (supra) and M/s. Airen and Associates v. M/s. Sanmar Engineering Services Ltd., 2025 SCC OnLine SC 1562 10 financial creditor by IRP on 02.05.2022 does not enure to the benefit

of the secured financial creditor as the same was not made within

the period of limitation.

CONCLUSION

18. In view of foregoing analysis, the impugned judgment dated

15.10.2025 and order dated 22.01.2025 passed by NCLAT and NCLT

respectively are quashed and set aside.

19. In the result, the appeals are allowed. There shall be no order as to

costs.

.…..…….……………….………….……….J. [PAMIDIGHANTAM SRI NARASIMHA]

…..…….……………….………….……….J. [ALOK ARADHE]

NEW DELHI;

APRIL 29, 2026.

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