Limitation for Section 7 insolvency application runs from the crystallised decree or recovery certificate; later appeal does not revive time.

A Section 7 application under the Insolvency and Bankruptcy Code is governed by Article 137 of the Limitation Act, and limitation may run afresh from a decree or recovery certificate. Here, the application was filed after the decree dated 06.05.2011 and recovery certificates dated 22.12.2011, while the later dismissal of the corporate debtor's appeal on 14.02.2017 did not revive or extend limitation. The plea based on one-time settlement offers and alleged acknowledgment was insufficient on the facts found to save limitation, and the adjudicating authority had not addressed the limitation objection before admission. The admission order was set aside and the insolvency application was dismissed as time-barred.

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

Analysis: The limitation for a Section 7 application is governed by Article 137 of the Limitation Act, 1963 and, after a decree or recovery certificate, a fresh period of limitation may run from that date. The application here was filed after the decree of 06.05.2011 and the recovery certificates of 22.12.2011, and the subsequent dismissal of the corporate debtor's appeal on 14.02.2017 did not create a new period of limitation. The plea based on one-time settlement offers and alleged acknowledgment was not sufficient to extend limitation on the facts found, and the adjudicating authority had failed to deal with the limitation objection before admitting the application.

Conclusion: The application under Section 7 was held to be time-barred and could not have been admitted.

Final Conclusion: The admission order was set aside and the insolvency application was dismissed as barred by time.

Ratio Decidendi: A Section 7 application must be filed within the limitation period prescribed by Article 137, and a subsequent appeal against an already crystallised decree does not, by itself, extend or revive limitation for initiating insolvency proceedings.

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