Shankar Khandelwal v. Omkara Asset Reconstruction Pvt. Ltd., 2026
Admission of claim by Resolution Professional is purely administrative and does not amount to acknowledgment of debt under Section 18 of the Limitation Act.
Judgement Details
Court
Supreme Court of India
Date of Decision
30 April 2026
Judges
Justice Pamidighantam Sri Narasimha & Justice Alok Aradhe
Citation
Acts / Provisions
Section 13(1)(ia), Hindu Marriage Act, 1955
Section 25, Hindu Marriage Act, 1955
Facts of the Case
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The dispute arose out of loan facilities originally sanctioned by Diwan Housing Finance Corporation Ltd. (DHFL) in 2014 to corporate borrowers.
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Two loan accounts were involved, which later turned into Non-Performing Assets (NPA) on 06.12.2016, constituting the date of default.
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After DHFL underwent Corporate Insolvency Resolution Process (CIRP), its loan portfolio was assigned to Omkara Asset Reconstruction Pvt. Ltd. (ARC).
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Meanwhile, the corporate debtor companies were also subjected to a separate CIRP initiated by another creditor, during which a Resolution Professional (RP) was appointed.
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In that CIRP, the RP admitted the creditor’s claim on 02.05.2022 and later updated it on 21.02.2024.
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The earlier CIRP of the corporate debtor was subsequently set aside, restoring the creditor’s right to initiate fresh proceedings.
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Thereafter, Omkara ARC filed Section 7 applications under IBC on 23.09.2024, relying on the RP’s claim admission to argue that limitation had been extended.
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The appellant (erstwhile director) objected, contending that the application was barred by limitation under Article 137 of the Limitation Act (3 years from default).
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NCLT admitted the application, and NCLAT upheld it, holding that RP’s admission constitutes acknowledgment under Section 18 of Limitation Act, thereby extending limitation
Issues
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Whether admission of claim by a Resolution Professional amounts to acknowledgment of debt under Section 18 of the Limitation Act, 1963?
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Whether such admission can extend or restart the limitation period for filing a Section 7 application under the Insolvency and Bankruptcy Code, 2016?
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Whether the Resolution Professional performs an adjudicatory or purely administrative function while admitting claims?
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Whether the Section 7 application filed in 2024 was within limitation or barred by time?
Held
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Admission of claim by Resolution Professional is purely administrative and does not amount to acknowledgment of debt under Section 18 of the Limitation Act.
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RP does not exercise adjudicatory powers; hence its acts cannot bind corporate debtor as acknowledgment of liability.
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Limitation for Section 7 IBC starts from date of default and cannot be revived by RP’s claim admission.
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Section 7 application filed in 2024 was barred by limitation.
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NCLAT judgment was set aside and appeals were allowed.
Analysis
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The Court strongly reinforced the principle that IBC operates within strict limitation discipline, preventing revival of stale debts.
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It clarified a major confusion created by lower tribunals regarding RP’s role and legal effect of claim admission.
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The ruling draws a clear boundary between:
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administrative acts (RP functions) and
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legal acknowledgments (debtor liability admission)
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It prevents misuse of CIRP processes to extend limitation artificially through administrative entries.
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The judgment strengthens the principle of commercial certainty and finality in insolvency law.
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It also aligns with earlier jurisprudence that IBC is a time-bound, creditor-driven but legally structured recovery mechanism.