Limitation for insolvency claims turns on Article 137, acknowledgments, and a continuing cause of action under the IBC.

For a section 9 Insolvency and Bankruptcy Code application, Article 137 of the Limitation Act applies where no specific limitation period is prescribed, so the right to apply is measured from the date the Code came into force and the application was filed within time. The underlying operational debt was also held not time-barred because the corporate debtor had repeatedly acknowledged liability in notices and correspondence, and the pending winding-up proceedings did not extinguish the claim. On those facts, the matter disclosed a continuing cause of action and the insolvency application and debt claim were treated as within limitation.

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Issues: (i) whether the application under section 9 of the Insolvency and Bankruptcy Code, 2016 was within limitation, and (ii) whether the operational debt claim was barred by limitation on the facts, including the effect of prior acknowledgments and pending winding-up proceedings.

Issue (i): whether the application under section 9 of the Insolvency and Bankruptcy Code, 2016 was within limitation

Analysis: No specific period of limitation is prescribed for an application under section 9, so Article 137 of the Limitation Act, 1963 applies. The right to apply under section 9 accrued when the Insolvency and Bankruptcy Code, 2016 came into force, and the application was filed within three years of that date.

Conclusion: The application under section 9 was within limitation.

Issue (ii): whether the operational debt claim was barred by limitation on the facts, including the effect of prior acknowledgments and pending winding-up proceedings

Analysis: The debt had been repeatedly acknowledged by the corporate debtor, including in replies to notices and in correspondence showing an admission of liability. The earlier winding-up proceedings were pending when the insolvency regime commenced, and the earlier remedy did not extinguish the claim. On these facts, the claim disclosed a continuing cause of action and was not time-barred.

Conclusion: The claim was not barred by limitation.

Final Conclusion: The impugned order rejecting the insolvency application was set aside and the matter was remitted for admission after notice, leaving the parties free to settle before admission.

Ratio Decidendi: In the absence of a specific limitation period for a section 9 insolvency application, Article 137 of the Limitation Act, 1963 applies, and where the debt is acknowledged and the cause of action continues, the application and the underlying claim are not barred by limitation.

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