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ARTICLE · 01 NOVEMBER 2018

Supreme Court: Time-Barred Claims Cannot Be Brought Under IBC

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On 11 October 2018, the Supreme Court vide its judgment in B.K. Educational Services Private Limited v Parag Gupta and Associates (Civil Appeal No. 23988 of 2017) clarified the applicability of Limitation Act, 1963 ...

IndiaInsolvency/Bankruptcy/Re-Structuring
Prateek Kumar
Prateek Kumar
Snehal Kakrania
Snehal Kakrania
Raveena Rai
Raveena Rai
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On 11 October 2018, the Supreme Court (Court) vide its judgment in B.K. Educational Services Private Limited v Parag Gupta and Associates (Civil Appeal No. 23988 of 2017) clarified the applicability of Limitation Act, 1963 (Limitation Act) to the Insolvency and Bankruptcy Code, 2016 (Code).

Background

Parag Gupta and Associates, a financial creditor (Respondent) had filed an appeal before the National Company Law Appellate Tribunal (NCLAT) against an order of the National Company Law Tribunal (NCLT) whereby the Respondent's application for initiation of insolvency proceedings under Section 7 of the Code was rejected because it was barred by limitation. Vide its judgment dated 07 November .2017, the NCLAT held that the Limitation Act would not be applicable to the initiation of Corporate Insolvency Resolution Process (CIRP), and in cases where the financial and operational creditors are able to reasonably justify their delays in filing applications, the same can

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