Limitation and pecuniary jurisdiction: deposit of sums within limitation can avert CIRP and lead to IRP discharge.

Assessment focused on limitation and monetary threshold for a Section 9 claim: only two invoices fell within the limitation period and their aggregate met the insolvency threshold, so the Adjudicating Authority erred in denying pecuniary jurisdiction. The appellate outcome required conformity with that determination; a bona fide deposit by the corporate debtor covering the amounts within limitation plus interest and reimbursement of IRP expenses was accepted, resulting in setting aside the Section 9 admission, discharge of the IRP, and directions to pay the operational creditor and reimburse incurred IRP costs.

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Issues: (i) Whether the claim in the Section 9 application is barred by limitation and whether the Adjudicating Authority maintained pecuniary jurisdiction to admit the application; (ii) Whether an offer by the corporate debtor to pay the amount found within limitation should preclude admission and initiation of CIRP, and what consequential relief follows.

Issue (i): Whether the Section 9 claim was time barred and whether the Adjudicating Authority had pecuniary jurisdiction to admit the application.

Analysis: The legal framework requires assessment of limitation under the Limitation Act and of the monetary threshold under Section 4 of the Insolvency and Bankruptcy Code, 2016. The appellate determination identified that only two invoices fell within the three-year limitation period under Section 137 of the Limitation Act, 1963, and that the aggregate amount of those two invoices exceeded the minimum threshold prescribed under Section 4 of the Insolvency and Bankruptcy Code, 2016 (pre-amendment), thereby satisfying pecuniary jurisdiction for admission of a Section 9 application. The adjudicating authority's conclusion that the claim was non-maintainable for want of threshold was found to be factually incorrect in light of the invoices within limitation.

Conclusion: The issue is decided in favour of the Appellant on limitation and pecuniary jurisdiction; two invoices are within limitation and satisfy the insolvency threshold.

Issue (ii): Whether the corporate debtor's offer to pay the amount relating to invoices within limitation should have prevented admission and initiation of CIRP, and the appropriate consequential remedy.

Analysis: The appellate order admitting the Section 9 application became final as it limited the recoverable claim to the amounts within limitation. Subsequent to that order, the corporate debtor offered to deposit and/or pay the amount corresponding to the invoices within limitation together with accrued interest and also proposed to meet IRP expenses. The procedural posture required the Adjudicating Authority to act consistently with the appellate direction while considering any bona fide settlement offer. The adjudicating authority admitted the application by a brief order without dealing with the settlement offer; the appellate forum examined the record, the prior appellate determination on limitation, and the deposit made by the corporate debtor, and addressed the parties' competing contentions regarding settlement and IRP expenses.

Conclusion: The issue is decided in favour of the Appellant to the extent that the deposited amount corresponding to the invoices within limitation, together with interest, is to be paid to the operational creditor and the IRP's incurred expenses are to be reimbursed; admission under Section 9 and the IRP appointment are set aside.

Final Conclusion: The appeal is allowed; the impugned order admitting the Section 9 application is set aside, the IRP is discharged, and directions are given for payment of the amounts found due within limitation and reimbursement of IRP expenses, giving full effect to the appellate determination on limitation and pecuniary jurisdiction.

Ratio Decidendi: Where an appellate determination establishes that only specified invoices fall within the limitation period and meet the insolvency threshold, the adjudicating authority and subsequent proceedings must conform to that determination; a bona fide deposit or offer to pay the amounts so determined may be applied to avoid initiation or continuation of CIRP and to settle related expenses.

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