Limitation for insolvency applications runs from accrual of the right to apply, not later correspondence or demand notices.

An application seeking initiation of corporate insolvency resolution process was examined for limitation under the Insolvency and Bankruptcy Code and Article 137 of the Limitation Act. Limitation was treated as running from the date the right to apply accrued, namely the date of default or the last invoice supporting the claim, and not from later email correspondence or the demand notice. On that basis, a petition filed more than three years after the last invoice was held to be beyond time and not entertainable. The later correspondence did not extend the limitation period.

---

---

Issues: Whether the application under Section 9 of the Insolvency and Bankruptcy Code, 2016 for initiation of corporate insolvency resolution process was barred by limitation.

Analysis: The application was examined on the basis of Sections 8 and 9 of the Insolvency and Bankruptcy Code, 2016 and Article 137 of the Limitation Act, 1963. Limitation was held to run from the date when the right to apply accrued, namely the date of default or the last invoice giving rise to the claim, and not from later email correspondence or from the date of the demand notice. Since the last invoice was dated 02.06.2015 and the petition was filed on 12.03.2019, the application was beyond the three-year period prescribed under Article 137. The plea that limitation should run from the later email correspondence was rejected.

Conclusion: The application was barred by limitation and could not be entertained.

Ratio Decidendi: For an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, limitation under Article 137 of the Limitation Act, 1963 begins when the right to apply accrues, and a petition filed more than three years thereafter is barred unless delay is lawfully condoned.

---