Section 9 insolvency petition barred by disputed debt and limitation where creditor failed to establish enforceable operational debt.

Section 9 insolvency proceedings were found not maintainable where the operational debt was disputed and limitation had expired. The Tribunal noted that the claim arose from 2012 purchase orders and invoices, but the contractual terms did not support the claimed interest and the alleged acknowledgements were insufficient on the facts to extend limitation. As no effective recovery steps had been taken for several years, the debt was not satisfactorily established and the claim was barred by laches and limitation. The Code was applied as a debt-resolution framework, not a substitute recovery forum, and the application was rejected.

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Issues: Whether the application under Section 9 of the Insolvency and Bankruptcy Code, 2016 was maintainable in the facts of the case, particularly in view of the dispute regarding the debt and the objection based on limitation.

Analysis: The operational creditor's claim arose from purchase orders and invoices of 2012, and the Tribunal found that the contractual terms did not support the claimed interest component. The record showed that no effective steps were taken for recovery for several years, and the Tribunal was not persuaded that the alleged acknowledgements were sufficient to save limitation on the facts presented. Applying the principle that the Code is not a substitute for a recovery forum, and that limitation applies to proceedings under the Code, the Tribunal held that the alleged debt was not satisfactorily established and that the claim was barred by laches and limitation.

Conclusion: The application under Section 9 was not maintainable and was rejected; the petition was dismissed.

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