Limitation law in insolvency process

The Limitation Act covers applications filed for initiating corporate insolvency resolution process (CIRP) under the Insolvency and Bankruptcy Code from its inception in 2016, the Supreme Court has ruled in its judgment in BK Educational Services Ltd vs Parag Gupta Associates. In this batch of appeals, the court was concerned with Section 238A of the code, which was inserted in the second amendment to the code with effect from June 6 this year. According to this, "The provisions of the Limitation Act shall as far as may be, apply to the proceedings before the adjudicatory authority, the National Company Law Appellate Tribunal (NCLAT), the Debt Recovery Tribunal or the Debt Recovery Appellate Tribunal.” The NCLAT had ruled in several cases that the Act is not applicable for initiating CIRP and that a stale claim of dues three years old without explanation normally should not be entertained for triggering CIRP. Disagreeing with that view, the Supreme Court stated that even Section 433 of the Companies Act, which applies to the NCLT and the NCLAT, expressly stated that Limitation Act covered them. The analogy of other tribunals like the Competition Commission, the Securities Appellate Tribunal and the Telecom Disputes Settlement and Appellate Tribunal would not apply in the present case, as each of them is covered by the terms of the relevant legislation, the judgment said. All the appeals were returned to the NCLAT for fresh decision following this interpretation of the law.