Section 7 insolvency applications remain maintainable during lender restructuring, and limitation runs under the Limitation Act framework.

A Section 7 insolvency application remains maintainable despite pending Joint Lenders Forum proceedings or finalisation of a corrective action plan, because the Insolvency and Bankruptcy Code does not impose a general statutory bar apart from Section 11(c). Limitation for such proceedings is treated under Article 137 of the Limitation Act, 1963, with the right to apply accruing from 1 December 2016 when the Code came into force. The underlying debt was also held not time-barred, having regard to the mortgage, assignment of debt, and the applicable 12-year period for immovable property under Article 61. The insolvency admission was therefore sustained.

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Issues: (i) Whether an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 is maintainable during pendency of proceedings before the Joint Lenders Forum or finalisation of a corrective action plan; (ii) whether the application under Section 7 was barred by limitation and whether the claim itself was time-barred.

Issue (i): Whether an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 is maintainable during pendency of proceedings before the Joint Lenders Forum or finalisation of a corrective action plan.

Analysis: The filing of a Section 7 application is not excluded merely because the debtor's account is under consideration before a Joint Lenders Forum or a corrective action plan is being finalised. In the absence of any statutory bar, other than the restriction contained in Section 11(c) of the Insolvency and Bankruptcy Code, 2016, the initiation of corporate insolvency resolution proceedings remains permissible.

Conclusion: The application under Section 7 was maintainable.

Issue (ii): Whether the application under Section 7 was barred by limitation and whether the claim itself was time-barred.

Analysis: The limitation framework applicable to applications under the Insolvency and Bankruptcy Code, 2016 was treated as falling within Article 137 of the Limitation Act, 1963. Since the Code came into force on 1 December 2016, the right to apply was held to have accrued from that date, and the application was therefore within time. On the underlying debt, the Court also noted the mortgage, the assignment of the debt, and the applicable 12-year period relating to immovable property under Article 61 of the Limitation Act, 1963, and held that the claim was not barred by limitation.

Conclusion: The application and the claim were not barred by limitation.

Final Conclusion: The insolvency admission was sustained and the appeal failed on merits.

Ratio Decidendi: A Section 7 application under the Insolvency and Bankruptcy Code, 2016 is maintainable unless specifically barred by statute, and limitation for such proceedings is governed by the applicable provisions of the Limitation Act, 1963.

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