Limitation in Section 7 insolvency must be examined upfront; acknowledgment and exclusion pleas need factual scrutiny before admission.

Limitation under Section 3 of the Limitation Act must be examined by the Adjudicating Authority even without an objection, and a Section 7 insolvency application is governed by Article 137. The record indicated default from September 2012, while the demand notices were issued in 2016 and the application was filed on 31.12.2019, making limitation a live issue on the face of the record. Any plea based on acknowledgment under Section 18 or exclusion of time under Sections 5 and 14 required factual scrutiny before admission. The admission order was therefore unsustainable, and the matter had to be reconsidered afresh with an opportunity for the appellant to file a reply.

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Issues: Whether the Section 7 insolvency application was barred by limitation and could be admitted without first examining the dates of default, demand notices, and the plea of acknowledgment or exclusion of time.

Analysis: Limitation under Section 3 of the Limitation Act is mandatory and must be examined by the Adjudicating Authority even if no objection is raised. An application under Section 7 is governed by Article 137 of the Limitation Act, and the materials in Part IV and Part V of the application showed that the default had commenced in September 2012, while the demand notices relied upon were issued in May, June, and September 2016. On the face of the record, the application filed on 31.12.2019 was beyond three years from the notices and from the stated default dates. Any reliance on acknowledgment under Section 18 or exclusion of time under Sections 5 and 14 required factual scrutiny, which was not undertaken before admission.

Conclusion: The admission order could not be sustained because the limitation issue was not properly considered; the matter had to be reconsidered afresh, and the appellant was entitled to file a reply before the Adjudicating Authority.

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