Limitation under IBC section 7 bars insolvency petition where no valid acknowledgement extends time.

An application under section 7 of the Insolvency and Bankruptcy Code, 2016 was held barred by limitation because it was filed more than three years after the asserted default and the last relevant transaction. Article 137 of the Limitation Act, 1963 was applied to section 7 proceedings, and the tribunal found that a time-barred debt cannot be revived by commencing insolvency proceedings. In the absence of any written acknowledgement of liability within the limitation period under section 18 of the Limitation Act, 1963, no fresh period of limitation arose, so the petition was not maintainable.

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Issues: Whether the application under section 7 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation and therefore not maintainable.

Analysis: The application was founded on a loan granted in 2011 and default asserted in 2014, but it was filed in 2018, beyond three years from the date of default and the last relevant transaction. The limitation period under Article 137 of the Limitation Act, 1963 applies to applications under section 7 of the Insolvency and Bankruptcy Code, 2016, and a time-barred debt cannot be revived merely because insolvency proceedings are initiated. In the absence of any written acknowledgement of liability within the prescribed period under section 18 of the Limitation Act, 1963, no fresh period of limitation could be computed.

Conclusion: The application was barred by limitation and was not maintainable.

Final Conclusion: The insolvency petition failed as the debt had become time barred and no legally effective acknowledgement extended limitation.

Ratio Decidendi: An application under section 7 of the Insolvency and Bankruptcy Code, 2016 is governed by Article 137 of the Limitation Act, 1963, and where the claim is beyond three years from default without a valid acknowledgement under section 18 of the Limitation Act, 1963, the application is barred by limitation.

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