In Brief
Asset Reconstruction Company (ARCIL) sought to initiate corporate insolvency proceedings against V. Hotels Limited on 3 April 2018, claiming unpaid financial debt. The corporate debtor argued the application was barred by limitation since the loan was declared a non-performing asset on 1 December 2008—almost a decade prior. The Supreme Court held that the application was timely because the corporate debtor had acknowledged its liability in writing before the initial three-year limitation period expired (notably through settlement proposals in 2011 and letters in 2013), thereby resetting the limitation clock for a further three years. The Court further clarified that books of accounts and balance sheets acknowledging subsisting debt constitute valid acknowledgments under Section 18 of the Limitation Act, extending limitation even though made under statutory compulsion. The judgment was set aside and the CIRP application was admitted.
The lawyer headnote and full judgment text are available to registered users.