Limitation for insolvency applications runs from default, and later correspondence did not save a time-barred Section 9 claim.

An operational creditor's Section 9 application under the Insolvency and Bankruptcy Code is governed by Article 137 of the Limitation Act, with limitation running from the date of default; where the first default occurred in March 2011 and the application was filed much later, later correspondence did not amount to a timely acknowledgment under Section 18 and the claim was time-barred. A pre-existing dispute can defeat admission only if it existed before the demand notice and is supported by material showing a real controversy; routine service-related correspondence and objections raised only after notice did not establish such a dispute. The dismissal of the insolvency application was therefore sustained.

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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 between the parties prior to the demand notice under Section 8 of the Insolvency and Bankruptcy Code, 2016.

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

Analysis: The limitation period for an application seeking initiation of corporate insolvency resolution process is governed by Article 137 of the Limitation Act, 1963, and the right to apply accrues on default. The operational creditor's own demand notice and invoices showed the first default in March 2011, while the application was filed much later. The later correspondence relied upon as acknowledgement was outside three years from the first default and did not extend limitation under Section 18 of the Limitation Act, 1963.

Conclusion: The application under Section 9 was barred by limitation, against the appellant.

Issue (ii): Whether there was a pre-existing dispute between the parties prior to the demand notice under Section 8 of the Insolvency and Bankruptcy Code, 2016.

Analysis: A dispute must exist before receipt of the demand notice or invoice and must be supported by material showing a real controversy. The correspondence on record reflected only routine service-related issues and did not show any prior dispute regarding the alleged advertising commitment, training obligations, or other asserted breaches before issuance of the demand notice. The objections were raised only after notice.

Conclusion: No pre-existing dispute was established; this issue was decided in favour of the appellant.

Final Conclusion: The appeal failed on the limitation issue, and the dismissal of the insolvency application was sustained despite the absence of a pre-existing dispute.

Ratio Decidendi: For an operational creditor's application, the date of default governs limitation under Article 137 of the Limitation Act, 1963, and only a dispute existing before the demand notice can defeat admission under Section 9 of the Insolvency and Bankruptcy Code, 2016.

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