Limitation bars an unenforceable claim from supporting insolvency proceedings under section 9 of the IBC

A claim barred by limitation cannot constitute an enforceable debt under the Insolvency and Bankruptcy Code, so a section 9 application based on such a stale claim is not maintainable. The text notes that the demand arose from debit notes raised after the corporate debtor had been dispossessed, and the earlier arbitration application on the same claim had been dismissed without liberty to pursue the matter further. As there was no payment or acknowledgment after September 2011, the debt was treated as time-barred and legally unenforceable, leaving no surviving operational debt to support insolvency proceedings. The application was therefore dismissed.

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Issues: Whether the application under section 9 was maintainable when the claimed debt was found to be time-barred and unenforceable.

Analysis: The claim was based on debit notes raised for a period after the corporate debtor had been dispossessed from the premises, and the record showed that the earlier arbitration application concerning the same claim had been dismissed without liberty to pursue the matter further. In the absence of any payment or acknowledgment after September 2011, the claim was held to be barred by limitation. A time-barred claim does not amount to a debt within the meaning of the Insolvency and Bankruptcy Code, and therefore no enforceable operational debt survived for invocation of section 9.

Conclusion: The application was not maintainable and was dismissed.

Final Conclusion: The claim could not be enforced under the insolvency process because the debt was stale and legally unenforceable, leaving no basis for admission of the petition.

Ratio Decidendi: A claim that is barred by limitation and therefore unenforceable does not constitute a debt capable of sustaining proceedings under section 9 of the Insolvency and Bankruptcy Code, 2016.

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