Limitation for section 9 insolvency claims: time-barred operational debt cannot be revived without valid acknowledgment.

An application under section 9 of the Insolvency and Bankruptcy Code, 2016 is governed by Article 137 of the Limitation Act, 1963, so it must be filed within three years from accrual of the right to apply. Where the operational debt arose from invoices due in 2013 and the last admitted payment was made on 30.06.2015, a filing in August 2018 was time-barred. In the absence of a written acknowledgment of liability before expiry of limitation, section 18 of the Limitation Act did not extend time, and a stale debt could not be revived through insolvency proceedings.

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Issues: Whether the application under section 9 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation and therefore not maintainable.

Analysis: The debt arose from invoices that fell due in 2013, the last payment admitted on record was made on 30.06.2015, and the application was filed in August 2018, beyond the three-year period. No acknowledgment of liability in writing was shown before expiry of limitation so as to attract section 18 of the Limitation Act, 1963. The residuary Article 137 applied to the application under the Code, and the law did not permit revival of a debt already time-barred.

Conclusion: The application was barred by limitation and was not maintainable.

Ratio Decidendi: An application under section 9 of the Insolvency and Bankruptcy Code, 2016 is subject to Article 137 of the Limitation Act, 1963, and in the absence of a valid acknowledgment within the prescribed period, a time-barred operational debt cannot be enforced through insolvency proceedings.

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