Operational debt with acknowledged liability defeats limitation and pre-existing dispute objections in section 9 insolvency admission.

An acknowledged operational debt, supported by invoices, ledger entries and contemporaneous correspondence, was held to be within limitation; the debtor's alleged quality dispute lacked plausible supporting material and did not create a pre-existing dispute, so the section 9 application was maintainable. The objection based on sections 16G and 16M of the Tea Act, 1953 was also rejected, and the insolvency petition was admitted despite the contention that prior Central Government permission was required. The corporate insolvency resolution process was directed to commence, moratorium followed, and an interim resolution professional was appointed.

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Issues: (i) Whether the application under section 9 of the Insolvency & Bankruptcy Code, 2016 was barred by limitation or rendered non-maintainable by any pre-existing dispute; (ii) Whether the bar under the Tea Act, 1953 prevented initiation of insolvency proceedings against the corporate debtor.

Issue (i): Whether the application under section 9 of the Insolvency & Bankruptcy Code, 2016 was barred by limitation or rendered non-maintainable by any pre-existing dispute.

Analysis: The record showed supply of goods, receipt of invoices and correspondence confirming outstanding dues. The letter dated 13 January 2016, acknowledged by the corporate debtor under its seal, was treated as an acknowledgement of liability. The alleged dispute regarding inferior quality was not supported by any plausible contemporaneous material and did not displace the debt or the default shown on record. In view of the acknowledged liability and the dates reflected in the ledger and correspondence, the claim was held to be within limitation and the application was treated as complete in all respects.

Conclusion: The objection based on limitation and pre-existing dispute was rejected, and the application under section 9 was held maintainable.

Issue (ii): Whether the bar under the Tea Act, 1953 prevented initiation of insolvency proceedings against the corporate debtor.

Analysis: The corporate debtor relied on sections 16G and 16M of the Tea Act, 1953, contending that prior permission of the Central Government was necessary. The order does not record acceptance of this objection and the insolvency petition was admitted notwithstanding that contention.

Conclusion: The objection based on the Tea Act, 1953 was rejected.

Final Conclusion: The corporate insolvency resolution process was directed to commence, moratorium followed, and an interim resolution professional was appointed.

Ratio Decidendi: An acknowledged operational debt supported by contemporaneous records and unrefuted correspondence establishes maintainable default under section 9 of the Insolvency & Bankruptcy Code, 2016, while an unsubstantiated alleged dispute or collateral statutory objection will not defeat admission.

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