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Shankar Khandelwal v. Omkara Asset Reconstruction Pvt. Ltd. & Anr.

Civil Appeal · 2026 INSC 429Decided 29 Apr 2026
C.A. No.-013158-013159 - 2025
Justice Pamidighantam Sri Narasimha · Justice Alok Aradhe

Background

Two corporate debtors, of which the appellant was a director, had defaulted on loans originally sanctioned by DHFL in 2014; the accounts were declared NPAs in December 2016, and the debt was later assigned to Omkara Asset Reconstruction Pvt. Ltd. Omkara filed an application under Section 7 of the IBC in September 2024 seeking to initiate insolvency proceedings against the corporate debtors, which the NCLT admitted, holding it was within limitation. The NCLAT upheld this, reasoning that the resolution professional's "admission" of the debt during an earlier, separate CIRP against the debtor amounted to an acknowledgment of liability that extended the limitation period. The director-appellant challenged this before the Supreme Court.

Decision Breakdown

The Supreme Court held that even after excluding periods during which limitation stood suspended (including under this Court's COVID-related suo motu extension order and during the pendency of an earlier CIRP), the three-year limitation period for filing the Section 7 application expired on 01.08.2024, before the application was actually filed on 23.09.2024. The Court further held that a resolution professional's administrative act of merely admitting/entering a claim into the list of creditors during a CIRP is a clerical function, not a conscious and unequivocal acknowledgment of liability by the debtor, and therefore cannot extend limitation under Section 18 of the Limitation Act, 1963. Since no valid acknowledgment existed within the original limitation period, the application was time-barred. The NCLAT and NCLT orders admitting the insolvency petition were accordingly quashed and set aside, and the appeals were allowed with no order as to costs.

Lesson Learnt

A resolution professional's routine admission of a creditor's claim into the insolvency claims list is not the same as the debtor acknowledging the debt, and it will not automatically revive or extend a limitation period that has already run out. Creditors must file recovery/insolvency proceedings within the statutory limitation period and cannot rely on administrative claim-collation steps in an unrelated insolvency process to save a stale claim.

Official source (sci.gov.in)View Judgment (PDF)

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