In Brief
IL & FS Financial Services sought to initiate insolvency proceedings against Adhunik Meghalaya Steels under Section 7 of the Insolvency and Bankruptcy Code on 15 January 2024 for a Rs 55+ crore debt. The lower tribunals dismissed the application as time-barred, arguing that the deadline was 30 May 2022. The Supreme Court held that the respondent's 2019-20 balance sheet—showing secured borrowings matching prior years' figures and noting no repayment in the cash flow statement—validly acknowledged the debt under Section 18 of the Limitation Act, even without naming the creditor explicitly. This acknowledgment dated 12 August 2020 started a fresh three-year limitation period. Applying the Court's COVID-19 extension orders, limitation extended to 28 February 2025, making the 15 January 2024 filing timely. The Court set aside the tribunals' orders and remitted the case.
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