Limitation applies to insolvency applications from the start, so time-barred debts cannot trigger resolution proceedings.

The Limitation Act, 1963 applies to applications under sections 7 and 9 of the Insolvency and Bankruptcy Code, 2016 from the Code's inception. Section 238A was inserted to clarify that limitation governs insolvency proceedings, and the Code's definitions of claim, debt and default were read to require a legally due and payable debt. A default must therefore relate to a debt that is not time-barred, and time-barred claims cannot be used to trigger insolvency resolution. The result is that a dead remedy cannot be revived through proceedings under the Code.

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Issues: Whether the Limitation Act, 1963 applies to applications under sections 7 and 9 of the Insolvency and Bankruptcy Code, 2016 from the inception of the Code, and whether proceedings based on time-barred debts can be maintained.

Analysis: Section 238A was inserted to clarify the applicability of the Limitation Act to proceedings under the Code. The definitions of claim, debt, default, financial debt and operational debt in the Code were construed in context to mean that a debt must be legally due and payable, and a default must be a non-payment of a debt that is not barred by limitation. The scheme of the Code, read with section 433 of the Companies Act, 2013 and the role of the National Company Law Tribunal, showed that the Limitation Act was intended to apply to proceedings under sections 7 and 9. The Court also held that while limitation is ordinarily procedural and retrospective, a later law cannot revive a dead remedy. Time-barred claims cannot be used to trigger insolvency resolution proceedings.

Conclusion: The Limitation Act, 1963 applies to applications under sections 7 and 9 of the Code from the inception of the Code, and a time-barred debt cannot form the basis of such proceedings.

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