Application Of Limitation Act On Bankruptcy Code

The Insolvency & Bankruptcy Code was enacted in the year 2016. Since then there have been divergent views regarding the application of the Limitation Act, 1963, to the proceedings under the Insolvency & Bankruptcy Code, 2016 (Code). The provisions of the Code are used by the financial creditors as a tool to claim their debts. The creditors invoke the provisions of Code by filing application to initiate Corporate Insolvency Resolution Process (CIRP), even if the claims are more than three years old i.e. after the period of limitation has elapsed to recover the said debt by approaching a Civil Court. The Code did not provide (prior to 6.6.2018) that the provisions of the Limitation Act will be applicable on the proceedings under the Code.