In Brief
A cooperative bank sought to recover a debt of Rs. 6.7 crores from a defaulter, issuing a Recovery Certificate in 2001. After the bank merged, it filed an insolvency petition in 2017 under Section 7 of the Insolvency Code, claiming the debt remained due. The NCLT and NCLAT admitted the petition, treating the default as a continuing cause of action outside the limitation period. The Supreme Court reversed, holding that Article 137 of the Limitation Act applies to insolvency petitions. Since the default occurred over three years before filing, and the Recovery Certificate effectively and completely injured the appellant's rights, the claim was time-barred unless delay could be condoned under Section 5 of the Limitation Act.
The lawyer headnote and full judgment text are available to registered users.