Limitation for Section 7 insolvency applications runs from default date, and absent valid acknowledgment the claim is time-barred.

An application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was found barred by limitation because limitation was computed from the date the account was classified as a non-performing asset, treated as the date of default. Article 137 of the Limitation Act, 1963 was applied, so the three-year period had expired before filing. Balance-sheet entries were not accepted as a sufficient basis to extend limitation, and no effective acknowledgment within the limitation period was found to attract Section 18 of the Limitation Act, 1963. The application was therefore not maintainable as time-barred.

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Issues: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation.

Analysis: The date of default was taken as the date of declaration of the account as a non-performing asset, and the Adjudicating Authority applied Article 137 of the Limitation Act, 1963 to hold that the prescribed period of three years began from that date. The application was filed beyond that period. The materials relied upon by the petitioner, including balance-sheet entries, were not accepted as sufficient to extend limitation, and no effective acknowledgment within the limitation period was found to attract Section 18 of the Limitation Act, 1963.

Conclusion: The application was held to be time-barred and was not maintainable.

Ratio Decidendi: For an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, limitation runs from the date of default and Article 137 of the Limitation Act, 1963 applies; absent a valid acknowledgment within the prescribed period, a time-barred claim cannot be entertained.

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