Debt assignment and limitation in insolvency petitions can defeat maintainability when the creditor's records and pleadings are insufficient.

An assignee seeking admission of a section 7 insolvency application must show that the debt is reflected in its own records; where the account statements were in a third-party bank's books and no material showed the debt in the applicant's records, locus standi was not established and the application failed. Limitation must also be specifically pleaded and supported; where default was stated as 30.06.2014 but the petition was filed only in May 2019 with no plea for exclusion, extension, or condonation of delay, the defect was treated as fatal. On both grounds, the section 7 application was held not maintainable and was dismissed.

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Issues: (i) Whether the financial creditor had locus standi to maintain the application under section 7 when the assigned debt and account statements were shown in the books of a third party bank and not in the creditor's own records; (ii) Whether the application was barred by limitation for want of any pleading seeking exclusion or condonation of delay.

Issue (i): Whether the financial creditor had locus standi to maintain the application under section 7 when the assigned debt and account statements were shown in the books of a third party bank and not in the creditor's own records.

Analysis: The assignment of the debt from the original lender to the applicant was relied upon as the basis of the claim, but the supporting account statements annexed with the petition reflected the debt in the books of Kotak Mahindra Bank, a third party, rather than in the records of the applicant. The absence of any material showing that the debt stood recorded in the applicant's books, coupled with the fact that the merger of the original lender with Kotak occurred after the assignment, led to the conclusion that the petitioning creditor had not established that the debt was effectively reflected in its own account.

Conclusion: The issue was answered against the applicant and in favour of the respondent.

Issue (ii): Whether the application was barred by limitation for want of any pleading seeking exclusion or condonation of delay.

Analysis: The petition itself recorded the date of default as 30.06.2014, while the application was filed in May 2019. No pleading was made seeking exclusion of time, extension of limitation, or condonation of delay. The omission was treated as fatal because limitation had to be specifically pleaded and substantiated on the face of the petition, and no material beyond the pleadings could be relied upon to cure that defect.

Conclusion: The issue was answered against the applicant and in favour of the respondent.

Final Conclusion: The application under section 7 was not maintainable and was dismissed, as the creditor failed to establish maintainability on account of both locus and limitation.

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