Limitation for mortgage-secured insolvency claims: continuing debt and DRT proceedings did not bar the section 7 application.

A section 7 insolvency application was considered within limitation where the debt was secured by equitable mortgage and the sanction letters and restructuring arrangements showed a continuing creditor-debtor relationship. For mortgage-secured debts, Article 62 of the Limitation Act permits a twelve-year period from when the money becomes due, and the pendency of recovery proceedings before the DRT did not extinguish the creditor's right to invoke insolvency. The limitation objection based on section 14 was treated as inapplicable on these facts, so the application was not time-barred.

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Issues: Whether the application under section 7 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation in view of the age of the debt, the pendency of recovery proceedings before the Debt Recovery Tribunal, and the existence of an equitable mortgage over immovable property.

Analysis: The debt was secured by equitable mortgage and the sanction letters and restructuring arrangements showed a continuing creditor-debtor relationship. For mortgage-secured debts, Article 62 of the Limitation Act, 1963 allows twelve years from the date the money becomes due. The filing and pendency of recovery proceedings before the Debt Recovery Tribunal did not extinguish the creditor's right to invoke the insolvency process, and the Court treated the situation as one of continuous cause of action. The objection based on section 14 of the Limitation Act, 1963 was rejected as inapplicable to defeat the creditor's remedy in these facts.

Conclusion: The section 7 application was not time-barred and the limitation objection failed.

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