An acknowledgement u/s 18 of Limitation Act, 1963 made by the Principal Borrower is equally binding on the Corporate Guarantor – Sri Bijay Kumar Agarwal Vs. State Bank of India – NCLAT New Delhi
NCLAT held that it is well settled that any request by Borrower for one-time settlement tantamount to acknowledgement under Section 18 of the Limitation Act. Further, it concluded that acknowledgement made by the Principal Borrower within three years’ period from the date of account being declared NPA, there shall be fresh period of limitation available to the Financial Creditor and the Application under Section 7 having been filed within three years from the date of acknowledgement, cannot be held to be barred by time.
It also held that the limitation for proceedings under Section 7 are independent and separate from proceedings under the Recovery of Debts Due to Bank and Financial Institutions Act, 1993 and it is now well settled that Section 7 Application has to be filed within a period of limitation as prescribed under Article 137 of the Limitation Act.
