Limitation under IBC and proof of operational default led to admission of the Section 9 insolvency petition.

For proceedings under the Insolvency and Bankruptcy Code, 2016, the Limitation Act, 1963 applies, and a Section 9 application filed within three years from the accrual of the right to apply after 1 December 2016 is not time-barred. On the debt dispute, earlier admission of liability, part payments, and the absence of any substantiated reply were treated as sufficient to show an unpaid operational debt and continuing default. On that basis, the limitation objection failed, default was established, and the petition was admitted with commencement of CIRP, appointment of an interim resolution professional, and imposition of moratorium.

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Issues: Whether the application under Section 9 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation and whether the operational debt and default were established so as to admit the petition.

Analysis: The application was filed after the Code had come into force, and the Tribunal treated the later incorporation of Section 238A of the Insolvency and Bankruptcy Code, 2016 as making the Limitation Act, 1963 applicable to proceedings under the Code. Relying on the view that the right to apply under Section 9 accrues from 1 December 2016 for limitation purposes, the Tribunal held that the present application was within three years and not time-barred. On the merits of default, the Tribunal found that the respondent had earlier admitted the debt, had made part payments, and had not substantiated its bare denials or filed any reply to the application, so the operational debt remained unpaid and default continued to exist.

Conclusion: The limitation objection failed and the existence of default was established, so the petition was admitted and CIRP was initiated against the corporate debtor.

Final Conclusion: The order results in commencement of the corporate insolvency resolution process, appointment of an interim resolution professional, and imposition of moratorium against the corporate debtor.

Ratio Decidendi: For proceedings under the Insolvency and Bankruptcy Code, 2016, the Limitation Act, 1963 applies, and an application under Section 9 filed within three years from the accrual of the right to apply after 1 December 2016 is not barred by limitation; where default remains uncontroverted, the petition is admitable.

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