Limitation under the IBC: Section 9 petition remained barred despite exclusion claims under the Limitation Act.

A Section 9 IBC petition was held time-barred because the right to apply accrued in July 2012 and the three-year period under Article 137 had expired before filing. The Tribunal held that Section 5 of the Limitation Act could not be invoked to condone delay where the application was governed by a specific limitation framework, and only statutory exclusions could be considered. Section 14 also did not assist, because even after excluding the time spent in the earlier company petition, the filing remained beyond the permissible period. The application for condonation was rejected and the petition was held not maintainable.

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Issues: (i) whether the delay in filing the petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 could be condoned under Section 5 of the Limitation Act, 1963; (ii) whether exclusion of time under Section 14 of the Limitation Act, 1963 saved the petition from the bar of limitation.

Issue (i): whether the delay in filing the petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 could be condoned under Section 5 of the Limitation Act, 1963

Analysis: The right to apply was held to have accrued in July 2012 when the last payment was made. Applying Article 137, the limitation period for the application was three years from that date. The petition was filed long after the prescribed period. The Tribunal held that Section 5 is not available where the statute prescribes a specific limitation regime for such an application and that only the statutory exclusions could be considered.

Conclusion: The delay could not be condoned under Section 5 of the Limitation Act, 1963.

Issue (ii): whether exclusion of time under Section 14 of the Limitation Act, 1963 saved the petition from the bar of limitation

Analysis: Even if the period spent in the earlier company petition was excluded, the petition was still filed well beyond the period that would remain after exclusion. On the facts accepted for the applicant, the application ought to have been filed immediately after disposal of the earlier proceeding, but it was instituted much later. The Tribunal therefore found that the petition remained time-barred even after giving the benefit of Section 14.

Conclusion: Exclusion of time under Section 14 did not save the petition from limitation.

Final Conclusion: The application for condonation was rejected and the Section 9 petition was held to be not maintainable as barred by limitation.

Ratio Decidendi: A petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 filed beyond the prescribed three-year limitation period is not saved by Section 5 of the Limitation Act, 1963 where a specific limitation framework applies, and it remains barred if exclusion under Section 14 of the Limitation Act, 1963 still leaves it out of time.

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