Limitation for insolvency applications runs from default date; later SARFAESI steps do not extend time.

An application under Section 7 of the Insolvency and Bankruptcy Code was held time-barred because limitation under Article 137 of the Limitation Act ran from the date of default. Classification of the account as a non-performing asset did not extend limitation, and later steps under the SARFAESI Act and proceedings before the Debt Recovery Tribunal were not treated as saving time. As the application was filed in 2019, it was beyond the three-year period and was dismissed as barred by limitation.

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

Analysis: The application sought commencement of corporate insolvency resolution process on the basis of a financial debt and the respondent remained ex parte. The decisive question was the starting point for limitation. The account had been classified as a non-performing asset on 05.04.2008, and the later steps under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and before the Debt Recovery Tribunal did not extend limitation. The period under Article 137 of the Limitation Act, 1963 was held to run from the date of default, and the application filed in 2019 was beyond three years from that date.

Conclusion: The application was barred by limitation and liable to be dismissed.

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