Limitation under IBC Section 9 depends on a sustainable default date; defective demand notices cannot be cured at admission.

Limitation for a Section 9 IBC application is governed by Article 137 of the Limitation Act, read with Section 238A of the IBC, and must be computed from a legally sustainable date of default. Where the operational creditor relied on shifting or multiple default dates, the Tribunal treated the later date as unsustainable and held that the invoices on record did not justify altering the default date to save limitation. A demand notice issued without annexing the supporting invoices was found defective, and the defect could not be cured at the admission stage under Section 9(5)(ii).

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Issues: (i) Whether the petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation. (ii) Whether the demand notice was defective for want of the supporting invoices and for reliance on multiple dates of default.

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

Analysis: The applicable limitation framework for applications under the Code is Article 137 of the Limitation Act, 1963, read with Section 238A of the Insolvency and Bankruptcy Code, 2016. The relevant point for computing limitation is the date of default. The petitioning creditor relied on shifting dates of default, including a later date based on a demand letter and also an earlier period linked to the invoices and part payment. The Tribunal held that the later date relied upon was not sustainable and that the invoices placed on record did not justify adoption of a different default date so as to save limitation.

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

Issue (ii): Whether the demand notice was defective for want of the supporting invoices and for reliance on multiple dates of default.

Analysis: The demand notice under Section 8 of the Insolvency and Bankruptcy Code, 2016 was issued without annexing the invoices said to form the basis of the operational debt. The Tribunal found that, in the facts of the case, the invoices were material to prove both the debt and the default. It further held that the Tribunal could not confine the claim to selected invoices or accept multiple dates of default for computing limitation, and that the defect in the demand notice could not be cured at that stage under Section 9(5)(ii).

Conclusion: The demand notice was found to be defective and incapable of sustaining admission of the petition.

Final Conclusion: The insolvency application failed because the claimed default date was unsustainable, the notice process was defective, and the claim could not be rescued by selective reliance on invoices or dates of default.

Ratio Decidendi: In proceedings under Section 9 of the Insolvency and Bankruptcy Code, 2016, limitation must be computed from a legally sustainable date of default, and where the operational creditor relies on invoices to prove default, the Tribunal cannot manufacture a fresh default date by selectively accepting some invoices while disregarding others or by curing a defective demand notice at the admission stage.

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