Limitation under IBC Section 7 bars a stale insolvency claim where filing exceeds three years from default.

A Section 7 insolvency application is subject to the Limitation Act, 1963 through Section 238A of the Insolvency and Bankruptcy Code, with Article 137 governing the three-year limitation period from the date of default. On the stated facts, the default date was treated as 23.05.2014 and the application was filed on 05.02.2019. Although two letters dated 08.09.2015 acknowledged liability, they could extend limitation only up to 07.09.2018. As the application was filed after that date and the limitation objection was not effectively rebutted, the claim was held time-barred and rejected.

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Issues: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation.

Analysis: Section 238A of the Insolvency and Bankruptcy Code, 2016 makes the Limitation Act, 1963 applicable to proceedings under the Code. The relevant date of default was treated as 23.05.2014, and the application was filed on 05.02.2019. The record also showed two letters dated 08.09.2015 acknowledging liability, which could extend limitation only up to 07.09.2018. Since the application was filed after that date, and the objection on limitation was not effectively rebutted, the claim was held to be time-barred. The reasoning was applied consistently with the principle that Article 137 governs applications under Sections 7 and 9 of the Code and that a default beyond three years before filing attracts the bar of limitation, subject to condonation in appropriate cases.

Conclusion: The application was barred by limitation and was rejected.

Ratio Decidendi: A Section 7 insolvency application is subject to the Limitation Act, 1963 through Section 238A, and if filed beyond three years from default without a legally effective extension or condonation, it is barred and liable to be rejected.

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