Insolvency petition by unregistered firm not barred by Partnership Act, but fails if filed beyond Article 137 limitation.

An application under section 9 of the Insolvency and Bankruptcy Code is not barred by section 69(2) of the Indian Partnership Act merely because it is filed by an unregistered partnership firm, since such an application is an insolvency proceeding and not a suit to enforce a contractual right. The same application remains subject to Article 137 of the Limitation Act, and limitation runs from the date of default. If filed beyond three years from default without a valid acknowledgment or other basis for extension, it is time-barred. On the facts noted, the partnership-law objection failed, but the limitation objection succeeded.

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Issues: (i) Whether an application under section 9 of the Insolvency and Bankruptcy Code, 2016 is barred by section 69(2) of the Indian Partnership Act, 1932 when filed by an unregistered partnership firm; (ii) Whether the application is barred by limitation under Article 137 of the Limitation Act, 1963.

Issue (i): Whether an application under section 9 of the Insolvency and Bankruptcy Code, 2016 is barred by section 69(2) of the Indian Partnership Act, 1932 when filed by an unregistered partnership firm.

Analysis: Section 69(2) of the Indian Partnership Act, 1932 bars a suit to enforce a contractual right by or on behalf of an unregistered firm. An application under the Insolvency and Bankruptcy Code, 2016 is not a suit but an insolvency proceeding. The statutory bar, therefore, does not extend to an application under section 9 of the Code.

Conclusion: The objection based on section 69(2) of the Indian Partnership Act, 1932 was rejected.

Issue (ii): Whether the application is barred by limitation under Article 137 of the Limitation Act, 1963.

Analysis: Applications under sections 7 and 9 of the Insolvency and Bankruptcy Code, 2016 are governed by Article 137 of the Limitation Act, 1963. Limitation begins when default occurs, and an application filed more than three years after default is barred unless there is a valid acknowledgment or other basis for extension or condonation. On the facts found, the date of default was 23-6-2015, the petition was filed on 25-9-2018, and no acknowledgment of liability within limitation was shown.

Conclusion: The application was held to be barred by limitation.

Final Conclusion: The insolvency petition did not succeed because the claim was held to be time-barred, while the partnership-law objection did not affect maintainability under the Code.

Ratio Decidendi: An application under section 9 of the Insolvency and Bankruptcy Code, 2016 is not hit by section 69(2) of the Indian Partnership Act, 1932, but it must satisfy Article 137 of the Limitation Act, 1963 and fails if filed beyond three years from default without a valid acknowledgment or extension.

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