The Limitation Act Under the IBC
Three years from default, a fresh three from each acknowledgment, and appeal deadlines that cannot stretch past 45 days.
Section 238A of the Code applies the Limitation Act, 1963 "as far as may be" to proceedings and appeals before the NCLT, the NCLAT, the DRT and the DRAT. The Code itself sets no period for filing a section 7 or section 9 application, so the Supreme Court has filled the gap with the Limitation Act's residuary article and its rules on acknowledgment, condonation and exclusion.
Limitation is one of the most litigated questions under the Code, and three of the cases that settled it, B K Educational Services, Babulal Vardharji Gurjar and Laxmi Pat Surana, are on IBBI's prescribed case-law list. None of these rules changed in the IBC (Amendment) Act, 2026, so the exam's cut-off of 4 February 2025 and the current law give the same answers here.
You save ₹600
- Full 65-question mocks
- Case-study practice
- Area-wise practice
One payment, no subscription · Valid for 2 months
The Limitation Rules at a Glance
Section 7 or 9 application to the NCLT
Period
3 years from the date of default
Where it comes from
Article 137 of the Limitation Act via section 238A (B K Educational Services; Babulal Vardharji Gurjar)
Appeal from the NCLT to the NCLAT
Period
30 days, plus up to 15 more for sufficient cause
Where it comes from
Section 61(2)
Appeal from the NCLAT to the Supreme Court
Period
45 days, plus up to 15 more for sufficient cause
Where it comes from
Section 62
Defaults from 25 March 2020 for the notified period
Period
No CIRP application, ever, for that default
Where it comes from
Section 10A
| Proceeding | Period | Where it comes from |
|---|---|---|
| Section 7 or 9 application to the NCLT | 3 years from the date of default | Article 137 of the Limitation Act via section 238A (B K Educational Services; Babulal Vardharji Gurjar) |
| Appeal from the NCLT to the NCLAT | 30 days, plus up to 15 more for sufficient cause | Section 61(2) |
| Appeal from the NCLAT to the Supreme Court | 45 days, plus up to 15 more for sufficient cause | Section 62 |
| Defaults from 25 March 2020 for the notified period | No CIRP application, ever, for that default | Section 10A |
What Restarts, Extends or Pauses the Clock
- Acknowledgment (section 18)
- A written acknowledgment of liability, signed before the period expires, starts a fresh three-year period from the date it is signed. In Laxmi Pat Surana, a corporate guarantor's letter acknowledging the borrower's liability did this.
- Balance sheet entries
- Entries in a corporate debtor's signed balance sheets can amount to an acknowledgment under section 18, depending on the facts and any auditor's notes (Asset Reconstruction Co. v. Bishal Jaiswal, 2021).
- Decree or recovery certificate
- An unsatisfied DRT decree and recovery certificate give the creditor a fresh right, so a section 7 application lies within three years of the certificate (Dena Bank v. C. Shivakumar Reddy, 2021).
- Condonation (section 5)
- The NCLT can condone delay in a section 7 application for sufficient cause. A formal application is the norm, but its absence is not a bar if the record shows sufficient cause (Sesh Nath Singh, 2021).
- Exclusion (section 14)
- Time spent prosecuting another civil proceeding in good faith, including SARFAESI proceedings, can be excluded (Sesh Nath Singh, 2021).
Plead It or Lose It
In Babulal Vardharji Gurjar, the bank's application gave the NPA date of 8 July 2011 as the date of default and was filed in 2018. It tried to rely on acknowledgments later, but had not pleaded them. The Supreme Court held the application time-barred and annulled the whole CIRP, including the IRP's appointment. The 12-year period for a mortgage suit did not help either.
Quick practice on company law. No signup.
Appeals: The 15 Days Are a Hard Wall
The NCLAT can extend the 30-day appeal period by up to 15 days, and no further. In National Spot Exchange v. Anil Kohli (2021), the Supreme Court held that delay beyond those 15 days cannot be condoned, not even under Article 142 of the Constitution.
The clock starts when the order is pronounced, not when a free certified copy arrives. In V. Nagarajan v. SKS Ispat (2021), the Court held that a party must apply for a certified copy on pronouncement; only the time needed to obtain it is excluded under section 12(2) of the Limitation Act.
How the Limited Insolvency Examination Tests This
Expect a dated fact pattern: a loan account turned NPA on 31 March 2019, the borrower signed a balance sheet acknowledging the debt on 30 September 2020, and the bank filed under section 7 on 15 August 2023. Is it in time? You have to find the date of default, check whether the acknowledgment came before the three years ran out, and count three years from the acknowledgment. Here the filing is in time, but only if the acknowledgment is pleaded and proved.
The common traps: counting from the date the Code came into force, applying the 12-year mortgage period, or treating an appeal filed on day 46 as condonable.
FAQs
What is the limitation period for filing a section 7 application under IBC?expand_more
Three years from the date of default, under Article 137 of the Limitation Act read with section 238A of the Code. A written acknowledgment under section 18 made within that period starts a fresh three years.
Does section 18 of the Limitation Act apply to IBC proceedings?expand_more
Yes. In Laxmi Pat Surana (2021) the Supreme Court held that a fresh period runs from an acknowledgment by the principal borrower or the corporate guarantor, and in Bishal Jaiswal (2021) that balance sheet entries can be an acknowledgment.
What is the time limit to appeal an NCLT order to the NCLAT?expand_more
30 days under section 61(2), which the NCLAT may extend by up to 15 days for sufficient cause. Delay beyond 45 days in total cannot be condoned.
Can delay in filing a CIRP application be condoned?expand_more
Yes. In Sesh Nath Singh (2021) the Supreme Court held that the NCLT can condone delay in a section 7 application under section 5 of the Limitation Act, read with section 238A, if the applicant shows sufficient cause.
Next steps
- Initiating CIRParrow_forward
- NCLT and NCLATarrow_forward
- Landmark judgmentsarrow_forward
- Contract & Guaranteearrow_forward
65 questions, case-study format, negative marking.