Limitation under the Insolvency Code runs from default; restructuring correspondence did not extend time, so the petition failed.

An application under section 7 of the Insolvency and Bankruptcy Code, 2016 was held barred by limitation because the debt was treated as defaulted when the account became an NPA on 30-4-2013, and the petition filed on 12-9-2018 fell beyond the three-year period under Article 137 of the Limitation Act, 1963. Revival letters, demand notices, and restructuring or one-time settlement proposals did not amount to a fresh acknowledgment sufficient to extend limitation, and pending recovery proceedings before the DRT did not justify exclusion of time. The insolvency petition was therefore not maintainable.

---

---

Issues: Whether the application under section 7 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation under Article 137 of the Limitation Act, 1963.

Analysis: The financial debt was treated as defaulted when the account was classified as non-performing asset on 30-4-2013. The application was filed on 12-9-2018, beyond three years from the date of default. The materials relied upon to extend limitation, including the revival letter, demand notice, and restructuring or one-time settlement proposals, did not save limitation because they did not establish a fresh acknowledgment within the relevant period sufficient to keep the claim alive for the purpose of section 7. The Tribunal also noted that pending recovery proceedings before the Debt Recovery Tribunal did not justify exclusion of time for this application.

Conclusion: The application was barred by limitation and was not maintainable.

Final Conclusion: The insolvency petition could not be admitted, as the claim was held to be stale and outside the period prescribed for initiating proceedings under the Code.

Ratio Decidendi: For an application under section 7 of the Insolvency and Bankruptcy Code, 2016, limitation runs from the date of default, and a restructuring proposal or similar correspondence does not amount to a fresh acknowledgment unless it clearly extends the period of limitation within Article 137 of the Limitation Act, 1963.

---