Limitation for section 7 insolvency claims runs from default date; later NPA entries and post-expiry settlement cannot revive the claim.

For a section 7 Insolvency and Bankruptcy Code application, limitation runs from the date of default, not from the date of declaration of non-performing asset. The stated default date of 31.08.2013 meant the three-year period under Article 137 of the Limitation Act expired before filing. A later attempt to treat the NPA date as the default date was impermissible. Alleged part-payment could not extend limitation without a written acknowledgment signed by the payer under section 19, and a one-time settlement executed after expiry could not revive a time-barred claim. Section 18 was also inapplicable because no acknowledgment was made within the subsisting limitation period.

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Issues: Whether the application under section 7 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation, and whether the later entries relating to payment and one time settlement extended the period of limitation.

Analysis: The limitation period for a section 7 application runs from the date of default and not from the date of declaration of non-performing asset. The date of default disclosed by the financial creditor was 31.08.2013, which meant that the three-year period under Article 137 of the Limitation Act, 1963 expired before the application was filed. A subsequent attempt to substitute the NPA date as the date of default was impermissible. The alleged payment of 29.03.2017 could not extend limitation in the absence of an acknowledgment in writing signed by the person making the payment, as required by section 19 of the Limitation Act, 1963. The one time settlement was also executed after expiry of the limitation period and could not revive a dead claim. Section 18 of the Limitation Act, 1963 was likewise inapplicable because there was no acknowledgment within the subsisting period of limitation.

Conclusion: The application under section 7 was time-barred, and the admission order was liable to be set aside in favour of the appellant.

Ratio Decidendi: For a section 7 insolvency application, limitation begins from the date of default, cannot be shifted to the NPA date, and only a timely written acknowledgment or statutorily valid part-payment within the limitation period can extend or revive limitation.

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