Limitation for insolvency applications runs from default date; failed settlement talks do not create a fresh cause of action.

Limitation for a Section 7 Insolvency and Bankruptcy Code application runs from the date of default under Article 137 of the Limitation Act. A later one-time settlement, restructuring attempt, or negotiated proposal that fails does not create a fresh cause of action or extend limitation, and a continuing cause of action argument cannot displace the original default date. On that basis, the insolvency application remained time-barred, and the challenge to the dismissal order failed.

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Issues: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation under Article 137 of the Limitation Act, 1963, and whether a subsequent failed restructuring or settlement proposal gave rise to a fresh or continuing cause of action.

Analysis: Limitation for initiating corporate insolvency resolution proceedings commences from the date of default. Where the default date is identified, the cause of action does not shift merely because the debtor later entered into an OTS or negotiated settlement proposal that ultimately failed. A failed restructuring does not create a fresh cause of action, and the plea of continuing cause of action cannot override the running of limitation from the original default date.

Conclusion: The insolvency application remained barred by limitation and the challenge to the dismissal order failed.

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