Limitation for insolvency applications under Article 137 runs three years from accrual of the right to apply, making this filing timely.

An application under the Insolvency and Bankruptcy Code, 2016 was examined on limitation under Article 137 of the Limitation Act, which provides a three-year period from accrual of the right to apply. The limitation objection was rejected because the default was linked to classification of the account as a non-performing asset and a subsequent recall notice, and the application was filed within three years of those events. As the Code had come into force on 1 December 2016 and the application was filed on 24 October 2018, it was treated as being within time and not barred by limitation.

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Issues: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation.

Analysis: The limitation objection was rejected. The default was traced to the account being classified as a non-performing asset, followed by a recall notice, and the application was filed within three years thereafter. For an application under Section 7, Article 137 of the Limitation Act, 1963 applies, prescribing a three-year period from when the right to apply accrues. Since the insolvency code had come into force on 1 December 2016 and the application was filed on 24 October 2018, it was held to be within time.

Conclusion: The application under Section 7 was not barred by limitation.

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