RP’s Admission of Claim Amounts to Debt Acknowledgement u/s 18 of Limitation Act: NCLAT Holds S. 7 CIRP Petitions Within Limitation

The NCLAT (National Company Law Appellate Tribunal) held that when a Resolution Professional (RP) admits a financial creditor’s claim during an earlier Corporate Insolvency Resolution Process (CIRP), such admission constitutes a valid acknowledgement of debt under Section 18 of the Limitation Act. This acknowledgment restarts the limitation clock, enabling a fresh period for initiating a new CIRP under Section 7 of the IBC. The tribunal emphasised that the RP, by virtue of its legal authority during CIRP, can bind the corporate debtor, and that this admission reflects a “present, subsisting liability.” The judgment has major implications for creditors and insolvency professionals: it clarifies that acknowledgment during earlier proceedings can preserve or revive their claims, ensures that limitation does not unjustly bar valid claims, and contributes to the predictability of insolvency remedies.