Limitation for insolvency claims bars stale Section 9 applications unless filed within three years of default.

An application under Section 9 of the Insolvency and Bankruptcy Code, 2016 must be brought within three years from the date of default, as Article 137 of the Limitation Act, 1963 applies to such proceedings. On the facts noted, the claim arose from invoices and work orders issued between 2010 and 2012, with the last payment received on 11.02.2013, while the application was filed only on 29.06.2018. The analysis treats the default as occurring on 01.07.2011 and states that a time-barred debt cannot be used to commence CIRP unless delay is duly condoned.

---

---

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

Analysis: The claim arose from invoices and work orders issued between 2010 and 2012, with the last payment received on 11.02.2013. On the facts found, the default was treated as having occurred on 01.07.2011 and the limitation period expired well before the application was filed on 29.06.2018. The application under the Code is governed by Article 137 of the Limitation Act, 1963, and a petition filed beyond three years from default is not maintainable unless delay is duly condoned. The cited Supreme Court authorities were applied to hold that stale or time-barred claims cannot be used to trigger CIRP.

Conclusion: The application was barred by limitation and was liable to be rejected.

Ratio Decidendi: An application under Section 9 of the Insolvency and Bankruptcy Code, 2016 must be filed within three years from the date of default, and a time-barred debt cannot form the basis for commencement of CIRP absent condonation of delay.

---