Limitation and minimum default threshold govern section 9 insolvency admission when only part of the claim survives in time.

A section 9 application under the Insolvency and Bankruptcy Code is governed by Article 137 of the Limitation Act, with limitation running from the date default gives rise to the right to sue. On the facts discussed, only one invoice-based claim remained within time when the petition was filed, while the other claims were time-barred. The surviving claim was too small to meet the statutory minimum default threshold required for admission, even after interest was considered. The combined effect is that a section 9 petition must satisfy both limitation and the minimum default threshold before admission is possible.

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Issues: Whether the petition under section 9 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation and, in any event, whether the default crossed the minimum threshold required for admission.

Analysis: The invoices were raised on different dates and, after the contractual grace period, the due dates fell on 14.08.2016, 21.08.2016 and 29.09.2016. Applying the principle that the right to sue accrues on default and that an application under section 9 is governed by Article 137 of the Limitation Act, 1963, only the invoice dated 09.09.2016 could have been within time when the petition was filed on 23.09.2019. The other two claims were beyond three years. The surviving claim was only Rs. 36,074, and even with interest it remained below the statutory minimum default threshold of Rs. 1,00,000 prescribed for admission.

Conclusion: The petition was barred in part by limitation and the remaining claim did not satisfy the minimum default threshold, so admission under section 9 was not permissible.

Ratio Decidendi: A section 9 application cannot be admitted where the claim surviving limitation does not reach the statutory minimum default threshold, and the period of limitation runs from the date the default gives rise to the right to sue.

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