Supreme Court: Time-barred claim under Limitation Act; Recovery Certificate triggers limitation period.

The Supreme Court held that the claim in the case was time-barred under Article 137 of the Limitation Act. The right to sue accrued when the default occurred, and the Recovery Certificate issued in 2001 triggered the limitation period. The Court clarified that Section 23 of the Limitation Act applies to a continuing wrong, not a continuing right, and the Recovery Certificate constituted a complete injury to the appellant's rights. Consequently, the appeal was allowed, setting aside the orders of NCLT and NCLAT, with no costs awarded.

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Issues:
1) Application of Limitation Act to the case
2) Interpretation of Section 23 of the Limitation Act
3) Effect of a continuing wrong on limitation

Analysis:
1) The case involved a default of &8377; 6.7 Crores by respondent No.2, leading to a Recovery Certificate issued in 2001. A Section 7 petition was filed in 2017, admitted by NCLT in 2018, and dismissed by NCLAT in the same year. The issue of limitation arose, with the appellant arguing that no limitation period would apply due to the continuing default. The Supreme Court referred to a previous judgment and held that the right to sue accrues when a default occurs, and if the default is over three years old, the application would be barred under Article 137 of the Limitation Act unless Section 5 is invoked to condone the delay.

2) The appellant contended that Section 23 of the Limitation Act should save the limitation in this case. However, the Court referred to a precedent stating that Section 23 applies to a continuing wrong, not a continuing right. The judgment clarified that a continuing wrong creates a continuing source of injury, making the doer liable for the injury's continuation. In this case, the Recovery Certificate in 2001 effectively and completely injured the appellant's rights, triggering the limitation period.

3) The Court concluded that the claim in the present suit was time-barred, as the Recovery Certificate in 2001 marked the beginning of the limitation period. Citing the injury caused by the Certificate, the Court allowed the appeal, setting aside the orders of NCLT and NCLAT. The judgment emphasized that the amount due was undisputed and payable in law, with no costs awarded.

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