Limitation in insolvency petitions runs from default; prior winding up proceedings and belated acknowledgments do not save time-barred claims.

Limitation for a Section 9 Insolvency and Bankruptcy Code application runs from the date of default under Article 137 of the Limitation Act, and a prior winding up proceeding does not by itself extend time. Exclusion under Section 14(2) applies only where the earlier proceeding was pursued with due diligence and in good faith before a forum lacking jurisdiction or similar cause, and Section 18 can restart limitation only if the acknowledgment is made before expiry of the limitation period. On the stated facts, the last acknowledgment was in 2013 and no later valid acknowledgment was shown, so the application was time-barred and the contrary finding was unsustainable.

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Issues: Whether the application under Section 9 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation, and whether the pendency of winding up proceedings and the subsequent demand notice could save limitation or constitute a fresh period of limitation.

Analysis: Limitation for applications under the Insolvency and Bankruptcy Code, 2016 is governed by Article 137 of the Limitation Act, 1963, and the relevant date is the date of default. A prior winding up proceeding under the Companies Act, 1956 does not, by itself, extend limitation for a subsequent insolvency application. Exclusion of time under Section 14(2) of the Limitation Act, 1963 is available only where a prior proceeding was prosecuted with due diligence and in good faith in a forum unable to entertain it for want of jurisdiction or a like cause. An acknowledgment under Section 18 of the Limitation Act, 1963 can commence a fresh period of limitation only if made before the limitation period expires. On the facts, the last acknowledgment was in 2013, no fresh acknowledgment was shown thereafter, and the earlier winding up proceedings did not satisfy the requirements of Section 14(2).

Conclusion: The application under Section 9 was time-barred and the finding to the contrary was unsustainable.

Final Conclusion: The appeal succeeded and the order of the appellate tribunal was set aside, leaving the respondent to pursue any other remedy available in law.

Ratio Decidendi: For insolvency proceedings, limitation runs from the date of default, and neither pendency of earlier proceedings in another forum nor a post-expiry assertion of continuous cause of action can save the claim unless the requirements of exclusion of time or fresh acknowledgment are strictly satisfied.

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