Limitation for insolvency claims bars CIRP where acknowledgment comes after three years from debt due date.

An application for initiation of corporate insolvency resolution process was held not maintainable where the operational debt became due in 2006 and the acknowledgment relied on was dated 21.10.2015. Limitation was applied on the basis that acknowledgment must occur within three years from the date the debt became due and payable; an acknowledgment made after that period cannot extend time under Section 18 read with Article 137. On the admitted facts, the alleged acknowledgment was far beyond the statutory period, so the proceeding was barred by limitation.

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Issues: Whether the application for initiation of corporate insolvency resolution process was maintainable when the claimed debt became due in 2006 and the alleged acknowledgment relied upon was made in 2015, beyond the statutory period of limitation.

Analysis: The claim was founded on an operational debt stated to have become due in 2006. The alleged acknowledgment was dated 21.10.2015. For the purpose of extending limitation, acknowledgment must be made within three years from the date the debt became due and payable. On the admitted facts, the acknowledgment was far beyond that period. The proceeding was therefore tested against the law of limitation, including Section 18 and Article 137.

Conclusion: The application was held to be not maintainable as it was filed beyond the period of limitation.

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