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Issues: Whether the petition under section 9 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation, and whether entries in the balance sheets or the notice issued under section 434 of the Companies Act, 1956 extended the period of limitation.
Analysis: The default date was treated as 31.07.2009, and therefore the limitation period of three years expired on 30.07.2012. The winding up petition, later transferred and treated as a petition under section 9, was filed only on or after 24.06.2013, and was thus beyond limitation. The notice issued under section 434 was sent within limitation, but that did not cure the fact that the petition itself was filed after expiry of the limitation period. The balance sheets relied upon did not contain any entry amounting to a written acknowledgment of the specific debt claimed by the petitioner, and therefore did not extend limitation under section 18 of the Limitation Act, 1961.
Conclusion: The petition was held to be barred by limitation and was rejected.
Final Conclusion: The insolvency petition was not entertained on merits because the underlying claim was found to be time-barred.
Ratio Decidendi: A debt that is already barred by limitation on the date of filing cannot be revived merely because a statutory demand notice was issued within time, and a balance sheet entry extends limitation only when it amounts to a clear acknowledgment of the specific liability.
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