Limitation for Section 7 insolvency claims runs from default, and a later RERA order cannot revive a time-barred application.

A Section 7 insolvency application was held time-barred because limitation under Article 137 of the Limitation Act, 1963 runs for three years from the date the right to apply accrues. On the pleaded date of default of 24.10.2010, limitation had already expired, and non-delivery of possession did not suspend or extend time once default occurred. The alleged fresh period of limitation based on a RERA order was not available because no such foundation was raised in the Section 7 application or supporting pleadings. The NCLAT therefore upheld rejection of the application on limitation grounds.

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Issues: Whether the Section 7 application was barred by limitation under Article 137 of the Limitation Act, 1963, and whether the plea of continuing cause of action or a fresh period of limitation based on the RERA order could save the application.

Analysis: The date of default was stated by the appellant as 24.10.2010. For an application under Section 7 of the Insolvency and Bankruptcy Code, the period of limitation is governed by Article 137 of the Limitation Act, 1963, namely three years from the date when the right to apply accrues. The non-delivery of possession could not stop limitation from running once default had occurred on the pleaded date. The claim of a fresh period of limitation arising from the RERA order was also not available, as no such foundation was laid in the Section 7 application or supporting pleadings.

Conclusion: The Section 7 application was barred by limitation and was rightly rejected; the appeal failed.

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