Promise to pay time-barred debt can preserve enforceability; section 9 insolvency admission follows absent pre-existing dispute.

A debtor's written reply inviting discussion and settlement may amount to a promise to pay a time-barred debt under section 25(3) of the Indian Contract Act, preserving enforceability of the operational creditor's claim. The Tribunal also found no established pre-existing dispute and held that the section 9 IBC requirements were satisfied, so the insolvency application was admitted on the principal debt. The interest claim was rejected because no agreement to pay interest was shown. On that basis, moratorium and CIRP directions were issued.

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Issues: (i) Whether the operational creditor's claim was barred by limitation or was saved by the corporate debtor's written response as a promise to pay under the Indian Contract Act. (ii) Whether any pre-existing dispute existed and whether the application under section 9 of the Insolvency and Bankruptcy Code, 2016 was maintainable, including the interest component claimed.

Issue (i): Whether the operational creditor's claim was barred by limitation or was saved by the corporate debtor's written response as a promise to pay under the Indian Contract Act.

Analysis: The invoices were raised in February 2012, but repeated demands were made thereafter and a demand notice under section 8 of the Insolvency and Bankruptcy Code, 2016 was issued in November 2017. The corporate debtor's reply dated 14 December 2017 requested the creditor to send representatives with documents for discussion and settlement. That writing was treated as a promise to pay a time-barred debt within the meaning of section 25(3) of the Indian Contract Act, and the application filed in October 2018 was therefore held to be within limitation.

Conclusion: The claim was held to be within limitation and not barred.

Issue (ii): Whether any pre-existing dispute existed and whether the application under section 9 of the Insolvency and Bankruptcy Code, 2016 was maintainable, including the interest component claimed.

Analysis: The corporate debtor failed to establish any pre-existing dispute. The application was found to satisfy the requirements of section 9(2) and the supporting affidavits and bank statement showed non-payment of the operational debt. The claim for principal amount was accepted, but interest was disallowed because no agreement to pay interest was shown. On that basis, the section 9 application was admitted and insolvency process directions were issued.

Conclusion: The application was held maintainable and admitted, while the interest claim was rejected.

Final Conclusion: The operational creditor succeeded in establishing a recoverable operational debt within limitation, the insolvency petition was admitted, moratorium and CIRP directions were issued, and only the interest component was declined.

Ratio Decidendi: A written response by the debtor inviting settlement and discussion may amount to a promise to pay under section 25(3) of the Indian Contract Act, thereby extending enforceability; absent a proven pre-existing dispute and with the statutory requirements under section 9 satisfied, a section 9 insolvency application may be admitted for the principal debt, though contractual interest cannot be awarded without an agreement.

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