Limitation for Section 7 insolvency claims runs from default or NPA classification; belated filings without extension are time-barred.

Applications under Section 7 of the Insolvency and Bankruptcy Code, 2016 are subject to Article 137 of the Limitation Act, 1963, so limitation runs from the date of default. On the facts, classification of the account as a non-performing asset was treated as the date of default, and the filing came more than three years later. No valid basis for extension of limitation was shown, and the argument that the right arose only on the commencement of the Code was rejected as inconsistent with settled limitation principles. The Section 7 application was therefore barred by limitation, and the admission order was set aside.

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Issues: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation and the order admitting the corporate insolvency resolution process was liable to be set aside.

Analysis: The relevant limitation for applications under Section 7 of the Insolvency and Bankruptcy Code, 2016 is governed by Article 137 of the Limitation Act, 1963. The period begins from the date of default, and the date of classification of the account as a non-performing asset was treated as the date of default on the facts of the case. Since the default had occurred more than three years before the filing of the application and no sufficient basis was shown to extend limitation, the claim could not be revived as a live debt. The challenge that the right accrued only on the commencement of the Insolvency and Bankruptcy Code was rejected as inconsistent with the settled law on limitation.

Conclusion: The application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation and the admission order was set aside.

Ratio Decidendi: Applications under Section 7 of the Insolvency and Bankruptcy Code, 2016 are governed by Article 137 of the Limitation Act, 1963, and limitation runs from the date of default or non-performing asset classification; if filed more than three years thereafter without valid extension, the application is time-barred.

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