Petition Dismissed: Debt Time-Barred Under Limitation Act, Filing Beyond Limitation Period Without Liability Acknowledgment.

The NCLT rejected the petition filed under section 9 of the I&B Code by the Operational Creditor against the Corporate Debtor, stating the debt was time-barred under the Limitation Act. The Tribunal determined the petition was filed beyond the limitation period, without a valid acknowledgment of liability. The Tribunal did not assess the claim's merits, allowing the petitioner to seek alternative legal remedies. The Registry was instructed to notify the Operational Creditor of the order, and a compliance report was requested from the Designated Registrar.

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Issues:
Company petition under section 9 of Insolvency & Bankruptcy Code, 2016 (I&B Code) for non-payment of outstanding debt. Preliminary objection of the claim being barred by the law of limitation.

Analysis:
The petitioner, an Operational Creditor, filed a Company Petition under section 9 of the I&B Code against the Corporate Debtor for non-payment of an outstanding debt amounting to Rs. 30,34,508/-. The petition was based on the ground that the Corporate Debtor did not pay a balance amount of Rs. 8,27,106/- out of the total invoice amount. The petitioner submitted various documents including board resolution, bank statement, and legal notices to support the claim. The Corporate Debtor, in response, denied any amount due, stating that the claim was time-barred as it related to supplies made in 2008.

The Corporate Debtor raised a preliminary objection that the petition was barred by limitation, as the petition was filed almost ten years after the invoice date. The Tribunal acknowledged that the date of default was in 2009, and the limitation period for filing the petition would have expired in 2012. Referring to a relevant judgment, the Tribunal noted that a claim barred by limitation at the time of filing the petition cannot be considered within limitation even if the notice demanding payment was sent within the limitation period.

The petitioner argued that the Corporate Debtor's balance sheets showed sundry creditors, indicating liability for the outstanding amount. However, upon examination, the Tribunal found that these entries did not constitute an acknowledgment of liability in writing signed by the parties, as required under the Limitation Act. Consequently, the Tribunal concluded that the petition was time-barred and rejected it on that basis.

In the final order, the Tribunal rejected the petition under section 9 of the I&B Code against the Corporate Debtor, stating that the debt was barred by the law of limitation. The Tribunal clarified that its decision did not express an opinion on the merit of the claim, allowing the petitioner to pursue the claim through the appropriate legal channels. The Registry was directed to communicate the order to the Operational Creditor promptly, and a compliance report was requested from the Designated Registrar.

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