IBC process: SC Limitation Act ruling will hit claims, say experts

The immediate effect will be on claims being made operational by creditors under the insolvency code

The Supreme Court, last week, held that the Limitation Act of 1963 was applicable to the Insolvency and Bankruptcy Code (IBC) since the inception of the new bankruptcy law, which has been in effect since December 2016. Legal experts say operational creditors’ claims against insolvent companies will get affected if they did not initiate legal action three years prior to the commencement of the code. 

The Limitation Act prescribes the rules concerning the ‘statute of limitations’ or timescales within which a legal action may be taken, when there are breaches of a law or contract between parties. 

While several benches of the