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Issues: Whether the Section 9 application under the Insolvency and Bankruptcy Code, 2016 was barred by limitation and whether the operational creditor could treat old invoices as part of a running account to bring the claim within limitation.
Analysis: The appeal turned on the applicability of Article 137 of the Limitation Act, 1963 to an application under Section 9 of the Insolvency and Bankruptcy Code, 2016. The invoices relied upon were found to be dated between 2011 and 2016, with their respective due dates falling more than three years before the filing of the Section 9 application on 08.09.2020. No subsequent written acknowledgment of liability was shown to extend limitation. The record also did not establish any documentary basis for a running account arrangement between the parties, so the older invoices could not be aggregated with the last invoice to bypass the limitation bar. The insolvency process was also reiterated to be unavailable as a substitute for debt recovery.
Conclusion: The limitation objection was upheld, and the Section 9 application was correctly held to be time-barred. The challenge failed and the result was against the appellant.
Ratio Decidendi: An application under Section 9 of the Insolvency and Bankruptcy Code, 2016 is governed by Article 137 of the Limitation Act, 1963, and old operational debts cannot be revived for CIRP purposes in the absence of a legally sufficient acknowledgment or a proven running account.
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