In Brief
The Supreme Court held that winding up petitions filed under the Companies Act are subject to the three-year limitation period under Article 137 of the Limitation Act. When IL&FS filed a winding up petition against La-Fin in October 2016—more than three years after the company defaulted on a share purchase undertaking in August 2012—the petition was time-barred. The Court clarified that filing a separate suit for specific performance does not extend the limitation period for winding up proceedings, as they are distinct remedies. Additionally, winding up petitions cannot be used to enforce disputed debts. The Court set aside the NCLT and NCLAT orders admitting the petition.
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