Limitation bars revival of stale rent claims in insolvency when no later acknowledgment extends time

A claim for alleged rent arrears was rejected as time-barred because the debt related to April 2013 to July 2014, while the corporate insolvency resolution process began only on 05.05.2020. The lease agreement, an acknowledgment to pay damages, a calculation sheet and an e-mail dated 08.07.2014 did not establish any acknowledgment or document after that date to extend limitation. Applying Section 238-A of the Insolvency and Bankruptcy Code, the tribunal noted that stale debts cannot be revived merely by filing a claim in insolvency proceedings. The rejection of the claim was therefore valid and interference was not warranted.

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Issues: Whether the rejection of the applicant's claim by the resolution professional required interference under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, in view of limitation.

Analysis: The claim related to alleged rent arrears for the period April 2013 to July 2014, whereas the corporate insolvency resolution process commenced on 05.05.2020. The only materials relied upon were the lease agreement, an acknowledgment to pay damages, a calculation sheet, and an e-mail of 08.07.2014. No document after 08.07.2014 was produced to extend limitation or show a subsisting acknowledgment within the limitation period. In view of Section 238-A of the Insolvency and Bankruptcy Code, 2016, time-barred debts cannot be revived by filing a claim in insolvency proceedings, and the claim was already stale when CIRP began.

Conclusion: The rejection of the claim was valid and did not call for interference; the application was dismissed.

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