Limitation for section 7 insolvency claims: article 137 applies, and acknowledgments can keep the debt within time.

For a section 7 application under the Insolvency and Bankruptcy Code, article 137 of the Limitation Act, 1963 applies. The right to apply was treated as accruing from 1 December 2016, when the Code came into force, and repeated letters from the corporate debtor seeking a one-time settlement were treated as acknowledgments of liability. On that basis, the secured debt and continuing acknowledgments supported a continuing cause of action, so the section 7 claim was found to be within limitation and maintainable, and the limitation objection was rejected.

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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: For an application under section 7, article 137 of the Limitation Act, 1963 applies. The right to apply accrued from 1 December 2016 when the Insolvency and Bankruptcy Code came into force, and the record also showed repeated letters by the corporate debtor seeking one-time settlement. The secured nature of the debt and the continuing acknowledgments of liability supported the finding that the claim was within time and that there was a continuing cause of action.

Conclusion: The application under section 7 was held to be within limitation and maintainable, and the plea that the claim was barred by limitation was rejected.

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