Limitation under the Insolvency Code: Section 7 claim survived, and the plea that no debt was payable failed.

Section 238A of the Insolvency and Bankruptcy Code made the Limitation Act applicable to a Section 7 application, and Article 137 was treated as governing the right to apply from the time the Code came into force. On the facts, pending recovery proceedings, secured mortgaged assets, the corporate debtor's later one-time settlement request, and recognition of the liability in annual reports showed a continuing cause of action, so the financial creditor's claim was not time-barred. The debt was also not shown to be unenforceable in law, and the creditor's status and security interest supported subsistence of the claim. The Section 7 application was therefore not barred by limitation, and the objection that no debt was payable in law was rejected.

---

---

Issues: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 and the financial creditor's claim were barred by limitation, and whether the debt was not payable in law.

Analysis: The application was held to be governed by Section 238A of the Insolvency and Bankruptcy Code, 2016, making the Limitation Act, 1963 applicable as far as may be. The Court treated Article 137 of the Limitation Act, 1963 as applicable to an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, and held that the right to apply accrued when the Code came into force. The Court also relied on the continued existence of recovery proceedings under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, the mortgaged assets, the corporate debtor's subsequent one-time settlement request, and the showing of the liability in annual reports to hold that the claim had not become time-barred and that there was a continuing cause of action. The Court further held that the debt was not shown to be unenforceable in law and that the financial creditor's status and security interest supported the subsistence of the claim.

Conclusion: The application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was not barred by limitation, the claim was not barred by limitation, and the plea that no debt was payable in law was rejected.

---