Case Note & Summary
The appeal was filed by the Appellant against an order dated 06.02.2026, which dismissed the Section 94 application as barred by time. The account of the Corporate Debtor (CD) was declared a Non-Performing Asset (NPA) on 01.01.2016, with a notice issued under Section 13(2) on 27.06.2016 and symbolic possession notice on 02.01.2017. A decree was passed by the Debt Recovery Tribunal (DRT) on 18.02.2019. The Appellant made several settlement offers in 2020. The Adjudicating Authority noted that the application filed in 2025 was not within the time limit, even considering a suo motu order from the Supreme Court. The Appellant contended that the Adjudicating Authority failed to consider a letter dated 06.07.2022, which acknowledged the debt and should have extended the limitation period. However, the court found that the limitation period for the Section 94 application began with the cause of action arising from the notice issued in 2016 and the recovery certificate in 2019. The court ruled that acknowledgment letters from the Appellant could not extend the limitation period for filing the application. Consequently, the appeal was dismissed as the application was clearly time-barred.
Headnote
A) Limitation Law - Limitation Period for Section 94 Application - Time-barred Application - Insolvency and Bankruptcy Code, 2016, Section 94 - The application was filed in 2025, beyond the limitation period which commenced from the issuance of notice under Section 13(2) on 27.06.2016. The court held that acknowledgment letters from the Appellant did not extend the limitation period for filing the application under Section 94. (Paras 2-6)
Issue of Consideration
Whether the application filed under Section 94 was barred by time and if the acknowledgment letters extended the limitation period.
Final Decision
The appeal was dismissed as the application under Section 94 was filed in 2025, which was beyond the limitation period that commenced from the issuance of notice under Section 13(2) on 27.06.2016. The court held that acknowledgment letters from the Appellant did not extend the limitation period.
Law Points
- Limitation period
- Acknowledgment of debt
- Section 94 application
- Non-Performing Asset (NPA) declaration
- Recovery certificate issuance
