Limitation under IBC Section 7 runs from default, and NPA classification fixes the starting point unless valid extension applies.

Limitation for a Section 7 IBC application runs from the date of default, and in a non-performing asset matter that date is treated as the date of classification as NPA. Article 137 of the Limitation Act applies through Section 238A of the IBC, while any extension depends on a legally effective acknowledgment or part payment under Section 19, or condonation under Section 5 where made out. On the facts, the alleged payment on 19.02.2016 was not accepted as extending limitation, so the Section 7 application was beyond time and the admission order and consequential insolvency proceedings were set aside.

---

---

Issues: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation, and whether the alleged part payment on 19.02.2016 extended the period of limitation under the Limitation Act, 1963.

Analysis: The relevant law applied was Article 137 of the Schedule to the Limitation Act, 1963 as made applicable by Section 238A of the Insolvency and Bankruptcy Code, 2016. The period for initiating proceedings under Section 7 of the Code runs from the date of default, which in a non-performing asset case is the date of classification as NPA. The reasoning proceeded on the basis that limitation does not shift merely because a later payment is asserted, unless the requirements for a fresh period under Section 19 of the Limitation Act, 1963 are satisfied. The time for filing can be extended only in accordance with Section 5 of the Limitation Act, 1963 where condonation is made out.

Conclusion: The Section 7 application was held to be beyond limitation, and the plea of extension based on the alleged payment was not accepted.

Final Conclusion: The admission order and all consequential insolvency proceedings were set aside, and the appeal succeeded.

Ratio Decidendi: For an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, limitation runs from the date of default, and in an NPA matter that date is the date of classification as NPA unless a legally effective acknowledgment or payment extends limitation under the Limitation Act, 1963.

---