Limitation for insolvency claims: post-expiry part payment cannot revive time-barred proceedings under Sections 18 and 19.

An application under Section 7 of the Insolvency and Bankruptcy Code was held to be time-barred because the right to apply accrued from the first date of default and, under Article 137 of the Limitation Act, had to be exercised within three years. Sections 18 and 19 extend limitation only where acknowledgment of liability or part payment is made before expiry of the prescribed period. A payment relied upon by the applicant, having been made after the three-year period had expired, could not revive or extend limitation. The application was therefore treated as not maintainable.

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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 alleged part payment made after expiry of the prescribed period could extend limitation under Sections 18 and 19 of the Limitation Act, 1963.

Analysis: The application arose from a default traced to the compromise deed and the first date of default. Under Article 137 of the Limitation Act, 1963, the petition had to be filed within three years from the date when the right to apply accrued. Sections 18 and 19 of the Limitation Act, 1963 extend limitation only where acknowledgment of liability or payment is made before expiry of the prescribed period. The subsequent payment relied upon by the applicant was made after the three-year period had already expired and therefore could not revive or extend limitation.

Conclusion: The application was barred by limitation and was not maintainable.

Ratio Decidendi: For extending limitation under Sections 18 and 19 of the Limitation Act, 1963, acknowledgment of liability or part payment must occur before expiry of the prescribed limitation period; a later acknowledgment or payment does not revive the remedy.

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