Limitation for insolvency petitions: unverified account entries cannot by themselves establish liability or save a time-barred section 9 application.

An application under section 9 of the Insolvency and Bankruptcy Code, 2016 must be filed within limitation, and unverified account entries alone do not establish liability for admission. The demand notice was issued in 2019, while default was shown as occurring in 2016, and the operational creditor relied on an unverified statement of account and invoices from 2015-2016. The tribunal treated mere book entries as insufficient under section 34 of the Indian Evidence Act, 1872, and held that the petition could not be admitted simply because the corporate debtor did not file a reply. The petition was rejected as barred by limitation.

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Issues: Whether the petition under section 9 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation and liable to be rejected.

Analysis: The demand notice was issued on 30.01.2019 while the date of default was shown as 31.03.2016. The material relied upon by the operational creditor consisted of an unverified statement of account and invoices pertaining to the period July 2015 to February 2016. Mere entries in books of account were held insufficient to fasten liability under section 34 of the Indian Evidence Act, 1872. On the facts placed before it, the petition was filed beyond the prescribed period of three years and could not be admitted merely because no reply was filed by the corporate debtor.

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

Ratio Decidendi: An application under section 9 of the Insolvency and Bankruptcy Code, 2016 must satisfy limitation, and unverified account entries by themselves do not establish liability for admission of the petition.

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