Shankar Khandelwal vs. Omkara Asset Reconstruction Pvt. Ltd.

REPORTABLE
2026 INSC 429

IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION

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

SHANKAR KHANDELWAL ... APPELLANT

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

J U D G M E N T
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
17:25:11 IST
Reason:
secured financial creditor was within the period of limitation.

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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,
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reliance was placed on the decisions of this Court .
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

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Financial Assets and Enforcement of Security Interest Act, 2002
(hereinafter referred to as “the SARFAESI Act, 2002”) expired. It is
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further submitted that in view of the order passed by this Court , 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
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this Court .
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: -

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
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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:

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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
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137 of 1963 Act . 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)
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recovery . 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
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(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
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authoritatively enunciated by this Court . The provisions of the Code
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and the Regulations were considered by this Court 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
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under Section 18 of the Code 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
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amount to an acknowledgment under Section 18 of the 1963 Act .
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
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which has not already expired . 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)
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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)
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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
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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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