Limitation for Section 9 insolvency claims is not revived by non-merits winding-up proceedings or later related litigation.

Section 9 insolvency applications are subject to the three-year limitation period under Article 137 of the Limitation Act, and a claim already time-barred before the demand notice cannot be revived by prior winding-up proceedings that were not decided on the merits. Where the earlier winding-up petition was disposed of only because prior Central Government consent was required under the Tea Act framework, and no effective step was taken to obtain that consent, those proceedings did not suspend or save limitation. A later Supreme Court decision in related tea-garden litigation also did not extend time for the present parties. The insolvency claim remained barred by limitation.

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Issues: Whether the application under Section 9 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation, and whether the earlier winding-up proceedings and the subsequent Supreme Court decision extended or suspended limitation.

Analysis: The limitation period for an application under Section 9 was three years under Article 137 of the Limitation Act, 1963. On the facts, the last supply was made in May 2012, the last payment was made in August 2014, and the account was confirmed in March 2015, so the claim had already become time-barred before the Section 8 demand notice and the filing of the insolvency application in 2020. The earlier winding-up petition was not a merits adjudication of the debt claim; it was disposed of because, in view of the Tea Act, 1953 and the notification dated 28 January 2016, prior consent of the Central Government was required before proceeding further. No step was taken thereafter to obtain such consent. The later Supreme Court decision in the related tea-garden matter did not extend limitation in the present case, as it did not operate as a proceeding between these parties for limitation purposes.

Conclusion: The application under Section 9 remained barred by limitation, and the prior winding-up proceedings did not save limitation. The objection based on the Supreme Court decision also failed.

Final Conclusion: The appeal failed, and the dismissal of the insolvency application for limitation was sustained.

Ratio Decidendi: A time-barred debt claim cannot be revived for Section 9 insolvency proceedings merely because an earlier winding-up petition was disposed of with liberty to take steps in accordance with law, where no legally effective step was taken to obtain the required consent and the statutory limitation period had already expired.

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