In Brief
Dena Bank (now Bank of Baroda) filed an insolvency petition under the Insolvency and Bankruptcy Code, 2016 against a corporate debtor after more than three years from the date of default. The Adjudicating Authority admitted the petition, but the NCLAT set it aside, holding the petition was barred by limitation. The Supreme Court allowed the appeal, holding that a petition under Section 7 of the IBC is not barred by limitation if the corporate debtor acknowledged its debt within three years, extending the limitation period by a further three years under Section 18 of the Limitation Act. The Court further held that a final judgment and certificate of recovery give rise to a fresh cause of action to initiate insolvency proceedings within three years thereof, and that there is no bar to amendment of pleadings or filing additional documents in an IBC petition.
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