Acknowledgment of liability and part payment saved an IBC Section 9 claim from a limitation challenge.

An application under Section 9 of the Insolvency and Bankruptcy Code was challenged as time-barred on the basis that the operational debt arose from 2014-2015 invoices. The cheque issued on 12.01.2016 was treated as an acknowledgment of liability, and the record also reflected part payment on 16.02.2016 before the cheque was dishonoured. On those facts, the claim was held to be within limitation, and the limitation objection was rejected. The precedent relied on by the appellant was distinguished because the factual matrix was different and supported the respondent's case on limitation.

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Issues: Whether the application under Section 9 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation.

Analysis: The challenge rested on the plea that the operational debt arose from invoices of 2014-2015 and that the application filed in 2019 was beyond the prescribed period. The cheque issued on 12.01.2016 was treated as an acknowledgment of liability, and the record also showed part payment on 16.02.2016 followed by dishonour of the cheque. On these facts, the claim was held to be within limitation. The precedent relied on by the appellant was distinguished because the present case involved a different factual situation and supported the respondent's case on limitation.

Conclusion: The limitation objection was rejected and the admission of the Section 9 application was upheld.

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