Insolvency and Bankruptcy Code, 2016: s. 238A – Limitation – Application of Limitation Act, 1963 to applications u/s 7 under IBC – Execution of share purchase agreement between MCX, MCX– E and Financial Services Company in 2009 whereby Financial Services Company agreed to purchase equity shares of MCX–E from MCX – Pursuant thereto, LF, a group company of MCX, issued a ‘Letter of Undertaking’ to Financial Services Company to purchase shares of MCX–SX after a period of one year, but before a period of three years, from the date of investment – Expiry of the said period – In 2012 Financial Services Company exercised its option to sell its entire holding of shares in MCX–SX – However, LF’s case that it was under no legal or contractual obligation to buy the said shares – Suit by Financial Services Company for specific performance of the Letter of Undertaking by LF – High Court passing an injunction order by restraining LF from alienating its assets pending disposal of the suit – In 2016, Financial Services Company filing winding up petition against LF u/s. 433(e) in the High Court – However, due to introduction of IBC, 2016, transfer of the winding up petition to the NCLT as an application u/s. 7 – NCLT admitted the petition holding that the bar of limitation not attracted – Appeal by shareholders of LF – Dismissed by NCLAT – On appeal, held: Trigger point for the purpose of limitation for filing of a winding up petition would be the date of default in payment of the debt – Though it is clear that a winding up proceeding is a proceeding ‘in rem’ and not a recovery proceeding, the trigger of limitation for the winding up petition would be the date of default – On facts, statutory notice given on 03.11.2015 does not refer to any facts as to the commercial insolvency of LF – Statutory notice only refers to the suit proceedings and attachment by the Economic Offences Wing in December 2013 – Company’s insolvency neither been pleaded nor is on facts – In Form-1, upon transfer of the winding up proceedings to the NCLT, date of default is 19.08.2012; making it clear that three-years from that date had long since elapsed when the winding up petition was filed in 2016 – Thus, the winding up Petition being beyond the period of threeyears mentioned in Article 137 of the Limitation Act is time-barred, and cannot therefore be proceeded with – Impugned judgment of the NCLAT and the judgment of the NCLT set aside – Limitation Act, 1963 – Article 137 – Companies Act, 1956 – ss. 433 and 434.