Limitation and pre-existing dispute barred a section 9 insolvency application, leaving the admission request untenable.

A section 9 IBC application was barred by limitation where the date of default was in November 2011 and the petition was filed only in August 2018; later correspondence did not extend limitation. The record also showed a genuine pre-existing dispute, including allegations of loss of production, contractual non-compliance, BIFR proceedings, and a request to await restructuring and payment of old bills. As both limitation and prior dispute were established, the insolvency application was not maintainable and rejection was upheld.

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Issues: (i) whether the application under section 9 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation; (ii) whether there was a pre-existing dispute between the parties so as to defeat admission of the insolvency application.

Issue (i): whether the application under section 9 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation.

Analysis: The application was founded on invoices and dues which, on the appellant's own showing, pertained to a much earlier period, with the date of default reflected as November 2011 and the petition filed only in August 2018. On that basis, the claim was beyond the permissible period, and the later correspondence did not alter the limitation position in a manner sufficient to save the application.

Conclusion: The application was barred by limitation.

Issue (ii): whether there was a pre-existing dispute between the parties so as to defeat admission of the insolvency application.

Analysis: The record disclosed correspondence asserting loss of production, alleged contractual non-compliance, and reference to proceedings before the Board for Industrial and Financial Reconstruction, along with a request to await restructuring and payment of old bills. These communications showed that a dispute had arisen prior to the insolvency filing and was not a mere post-demand defence.

Conclusion: There was a pre-existing dispute.

Final Conclusion: The insolvency application was not maintainable, as it was both time-barred and hit by the existence of a prior dispute, and the rejection of the application was upheld.

Ratio Decidendi: An application under section 9 of the Insolvency and Bankruptcy Code, 2016 cannot be admitted where the claim is time-barred and the record shows a genuine pre-existing dispute prior to the insolvency demand.

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