Time-barred debts and the insolvency code – Vantage Asia

The Insolvency and Bankruptcy Code, 2016, has been construed as a complete code. Based on that construction and noting that the code contained no provision expressly making the Limitation Act applicable, and as the act could not be considered as applicable by necessary implication, time-barred debts were allowed to trigger insolvency proceedings. To remedy this, section 238A was introduced on the recommendations of the Insolvency Law Committee, making the act applicable to proceedings under the code with effect from 6 June 2018.

However, the question remained whether the amendment had retrospective effect. This was resolved by the Supreme Court in BK Educational Services Private Limited …