Limitation for Section 7 IBC claims must run from default, and stale debt cannot revive CIRP initiation.

A Section 7 Insolvency and Bankruptcy Code application must be filed within three years from the date of default under Article 137 of the Limitation Act. The Tribunal noted that the application did not plead the date of default in Part IV and the record lacked material showing acknowledgment of debt or any other valid basis for extension or exclusion of time. Prior recovery proceedings and the provisions on limitation did not save the claim. The debt was therefore treated as time-barred and the application was rejected.

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

Analysis: The limitation period for an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 is governed by Article 137 of the Limitation Act, 1963 and runs from the date of default. The application did not disclose the date of default in Part IV, and the record did not contain pleadings or material showing a valid basis to bring the claim within limitation. The documents relied on did not establish any acknowledgment of debt within limitation or any other legally sustainable ground for extension or exclusion of time. The Tribunal also found that the debt had become time-barred long before the filing of the application, even after considering the effect of prior recovery proceedings and the principles under Sections 14 and 18 of the Limitation Act, 1963.

Conclusion: The application was held to be barred by limitation and was rejected.

Ratio Decidendi: A Section 7 application must be filed within three years from the date of default, and in the absence of pleaded facts or supporting material establishing acknowledgment or other legally permissible extension of limitation, a stale debt cannot be revived for initiation of CIRP.

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