Limitation for insolvency applications runs from default; recovery certificates do not revive time under the Code.

Applications under the Insolvency and Bankruptcy Code are subject to the Limitation Act, with Article 137 making limitation run from the date of default. Civil suits, Debt Recovery Tribunal proceedings, or issuance of recovery certificates do not create a fresh cause of action or revive the limitation period for a separate Section 7 insolvency application. The Adjudicating Authority must also examine limitation on its own under Section 3 of the Limitation Act. On that basis, the text states that a Section 7 application filed after expiry of limitation is time-barred and that an admission order based on it is unsustainable.

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Issues: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation, and whether the issuance of recovery certificates or prior recovery proceedings gave rise to a fresh cause of action for initiation of insolvency proceedings.

Analysis: The Limitation Act applies to applications under the Insolvency and Bankruptcy Code, 2016, and Article 137 governs the period of limitation. Time begins to run from the date of default, and the filing of civil suits, proceedings before the Debt Recovery Tribunal, or issuance of recovery certificates does not extend limitation for a separate and independent proceeding under the Code. The reasoning in the cited precedents was applied to hold that a recovery certificate does not create a fresh trigger for filing a Section 7 application. The Adjudicating Authority was also required to examine limitation on its own in view of Section 3 of the Limitation Act, 1963.

Conclusion: The Section 7 application was hopelessly time-barred, and the admission order was unsustainable.

Ratio Decidendi: For an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, limitation runs from the date of default under Article 137 of the Limitation Act, 1963, and recovery proceedings or a recovery certificate do not revive or extend that limitation period.

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