In Brief
A cooperative bank sought to initiate corporate insolvency proceedings against a textile exporter in default on a cash credit facility granted in 2012. The debtor challenged the application as time-barred, arguing the three-year limitation period had expired. The Supreme Court held that Section 14 of the Limitation Act applies to IBC proceedings and permits exclusion of time spent in bona fide prosecution of earlier proceedings under SARFAESI Act. The Court ruled that while limitation applies to IBC applications under Article 137, delay can be condoned under Section 5 without formal application if sufficient cause exists. The proceedings under SARFAESI Act, though stayed by the High Court, qualified as civil proceedings entitling the creditor to time exclusion, making the insolvency application timely.
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