Limitation for interest claims in insolvency proceedings: belated claim rejected as time-barred under the Limitation Act.

A claim for the interest component in insolvency proceedings was found time-barred because the default and first demand arose on 21.12.2010, and the claim was pursued beyond the three-year limitation period under Article 137 of the Limitation Act, 1963. The later payment relied on by the claimant did not revive limitation under Section 19 of the Limitation Act, 1963. The Tribunal therefore rejected the interest claim as barred by limitation and noted that the resolution professional should have examined limitation when processing the claim.

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Issues: Whether the claim for interest component in the insolvency proceedings was barred by limitation and liable to be rejected.

Analysis: The application sought direction to admit the interest component of the creditor's claim. The admitted material showed that the first demand and corresponding default arose on 21.12.2010, and the claim for interest was pursued long after the three-year period prescribed by Article 137 of the Limitation Act, 1963. The later payment relied upon by the applicant did not extend limitation under Section 19 of the Limitation Act, 1963. On that basis, the interest claim was held to be time-barred. The Tribunal also noted that the resolution professional ought to have examined limitation while dealing with the claim.

Conclusion: The claim for interest was rejected as barred by limitation, and the application was dismissed.

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