In Brief
Dena Bank (now Bank of Baroda) sought admission of a petition under Section 7 of the Insolvency and Bankruptcy Code against a corporate debtor for initiating insolvency resolution, more than five years after default. The National Company Law Appellate Tribunal rejected it as time-barred under the three-year limitation period from the declaration of the account as Non-Performing Asset. The Supreme Court held that limitation does not apply rigidly: if the corporate debtor acknowledged its debt within three years before the petition was filed (through balance sheets, financial statements, or settlement proposals), a fresh three-year period begins. Additionally, a final judgment or Recovery Certificate from the Debt Recovery Tribunal constitutes a fresh cause of action. The Court also clarified that additional documents may be filed and pleadings amended during Section 7 proceedings unless expressly prohibited. The appeal was allowed, setting aside the NCLAT's order.
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