Operational creditor status requires proof of debt assignment, and insolvency claims remain subject to three-year limitation.

An applicant seeking to maintain a section 9 insolvency application as an operational creditor must prove a valid legal assignment of the debt; here, the record showed invoices issued by the original supplier and no clear transfer of the specific debt or contractual rights, so operational creditor status was not established. An insolvency claim based on default is also subject to Article 137 of the Limitation Act, 1963; the default and last payment dates placed the filing beyond three years, and no sufficient acknowledgment or part payment extending time was shown. The application was therefore not maintainable and was dismissed.

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Issues: (i) Whether the applicant was competent to maintain the section 9 application as an operational creditor on the basis of transfer or assignment of the debt. (ii) Whether the application was barred by limitation.

Issue (i): Whether the applicant was competent to maintain the section 9 application as an operational creditor on the basis of transfer or assignment of the debt.

Analysis: The applicant claimed to have acquired the healthcare business from the original supplier and relied on that transfer to assert the status of an operational creditor. The record did not show a clear transfer of the particular debt due from the corporate debtor, nor was there material establishing a business transfer agreement or other proof that the invoices raised by the original supplier and the corresponding debt stood legally assigned to the applicant. The invoices themselves reflected that they were issued by the original supplier, which negatived the existence of a direct contractual link between the applicant and the corporate debtor for the debt claimed.

Conclusion: The applicant failed to prove that it was the assignee of the debt and, therefore, failed to establish that it was an operational creditor entitled to maintain the application.

Issue (ii): Whether the application was barred by limitation.

Analysis: For proceedings under the Insolvency and Bankruptcy Code, the period of limitation is governed by Article 137 of the Limitation Act, 1963. The first default was traced to an invoice dated 13.07.2015, and even on the applicant's version the last payment was made on 04.01.2016. The application was filed on 18.02.2019, beyond three years from the date of default. No sufficient documentary proof of a later valid acknowledgment or part payment extending limitation was produced.

Conclusion: The application was barred by limitation.

Final Conclusion: The section 9 application was not maintainable both for want of proof of legal assignment of the operational debt and because the claim was time-barred; the proceeding was dismissed.

Ratio Decidendi: A section 9 applicant must prove a legal assignment of the operational debt to establish operational creditor status, and an insolvency application founded on default is subject to the three-year limitation period under Article 137 of the Limitation Act, 1963.

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