Limitation under the IBC bars stale operational debt claims where acknowledgments are unproved and liability is not shown in records.

An application under section 9 of the Insolvency and Bankruptcy Code was held time-barred because the alleged default arose in 2012 and the petition was filed only in November 2018, beyond the three-year limitation period. The Tribunal found that the e-mail exchanges and the letter of 3 June 2014 did not extend limitation, as they were not shown to be acknowledged by the corporate debtor and there was no reliable evidence of the debt appearing in its books. On pre-existing dispute, the debtor's letter referred to incomplete work and payment linked to commissioning, but no sufficient dispute was established to displace the claim. The petition was rejected as not maintainable.

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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 regarding incomplete work and non-payment.

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

Analysis: The invoices and alleged default arose in 2012. The application was filed in November 2018, well beyond three years from the date of the last invoice, the last payment, and even from the relied-upon correspondence of June 2014. The Tribunal held that the e-mail exchanges did not extend limitation because they were not acknowledged by the Corporate Debtor, and the letter dated 3-6-2014 also did not save limitation. There was no material to show that the alleged debt appeared in the books of account of the Corporate Debtor.

Conclusion: The application was time-barred and could not be admitted.

Issue (ii): Whether there was a pre-existing dispute regarding incomplete work and non-payment.

Analysis: The Corporate Debtor relied on its letter dated 3-6-2014 alleging pending work and stating that payment would be made after commissioning. The Tribunal noted that the letter also recorded difficulties on the Corporate Debtor's side and that there was no reply from the Operational Creditor denying the alleged pending work. At the same time, the absence of any reply to the demand notice did not by itself establish a pre-existing dispute sufficient to admit the petition, and the limitation bar remained decisive.

Conclusion: No sufficient pre-existing dispute was established to displace the claim, but this did not alter the dismissal of the application on limitation.

Final Conclusion: The operational insolvency petition was not maintainable and was rejected.

Ratio Decidendi: An application under section 9 of the Insolvency and Bankruptcy Code, 2016 must be filed within the prescribed limitation period, and unsupported correspondence or unproved acknowledgments do not extend time in the absence of reliable evidence of subsisting liability.

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