Article 137 governs section 7 insolvency claims, with limitation running from default, not Article 62 mortgage enforcement.

A section 7 insolvency application is ordinarily governed by Article 137 of the Limitation Act, with limitation running from the date of default; Article 62 applies to enforcement of mortgage rights and not to such insolvency proceedings. On that view, a default on 30-6-2012 made a petition filed on 15-9-2017 time-barred, while the other view treated recovery proceedings, rescheduling, and later settlement conduct as relevant to limitation. The members differed on whether those subsequent proceedings or acknowledgements saved or extended limitation, and no clear majority emerged on maintainability on limitation grounds.

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Issues: (i) Whether the application under section 7 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation on the facts stated, and whether Article 137 of the Limitation Act applied instead of Article 62; (ii) whether the subsequent proceedings and alleged acknowledgements extended or saved limitation.

Issue (i): Whether the application under section 7 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation on the facts stated, and whether Article 137 of the Limitation Act applied instead of Article 62.

Analysis: One member held that an application under section 7 is governed by Article 137 of the Limitation Act, that limitation runs from the date of default, and that Article 62 applies to suits for enforcement of mortgage rights and not to a section 7 application. On that view, the date of default being 30-6-2012, the petition filed on 15-9-2017 was beyond three years and therefore time-barred. The other member treated the matter differently and considered the factual matrix of recovery proceedings, rescheduling, and later conduct as sufficient to hold that the application was not barred.

Conclusion: The members recorded differing conclusions on limitation, and no clear majority decision emerged on this issue.

Issue (ii): Whether the subsequent proceedings and alleged acknowledgements extended or saved limitation.

Analysis: One view was that the proceedings before the DRT, DRAT, and the corporate debtor's later offer of settlement amounted to circumstances affecting limitation and supported admission of the petition. The contrary view was that those circumstances did not alter the core rule that limitation for a section 7 application runs from default and cannot be revived by the Code coming into force or by proceedings that do not amount to a legally effective extension within limitation.

Conclusion: The members differed on whether limitation was saved or extended, and the issue remained unresolved by a majority.

Final Conclusion: The order reflects a split on the maintainability of the insolvency petition on limitation, without a clear final consensus on admission or rejection on that ground.

Ratio Decidendi: A section 7 application is ordinarily governed by Article 137 of the Limitation Act, with limitation running from the date of default, and Article 62 does not govern such insolvency proceedings.

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