Section 7 IBC Limitation Runs from Date of NPA; IRP’s Admission Not Acknowledgment: Supreme Court Sets Aside CIRP Admission

The Supreme Court of India has set aside the orders of the National Company Law Appellate Tribunal (NCLAT) and the National Company Law Tribunal (NCLT) admitting a corporate insolvency process, clarifying that the period of limitation for a Section 7 application under the Insolvency and Bankruptcy Code (IBC) must be reckoned from the date the account was declared a Non-Performing Asset (NPA).

The Bench, comprising Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe, further held that the admission of a debt by an Interim Resolution Professional (IRP) or Resolution Professional (RP) is an “administrative function” and does not constitute an acknowledgment of liability under Section 18 of the Limitation Act, 1963.