Limitation for Operational Creditors under Section 9 of the IBC: Invoices, Part Payments and Acknowledgments

Suppliers often allow invoices to remain unpaid for years in the hope of preserving a commercial relationship. When they eventually turn to Section 9 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) to initiate a corporate insolvency resolution process (“CIRP”), the first question the National Company Law Tribunal (“NCLT”) may ask is whether the application is within the Section 9 IBC limitation period. If it is not, the Tribunal need not examine anything else. This article explains how limitation for Section 9 applications is calculated for operational creditors and what can extend the applicable period.

Limitation Applies to Section 9 Applications

Section 238A of the IBC applies the Limitation Act, 1963, as far as may be, to proceedings before the NCLT. In B.K. Educational Services (P) Ltd. v. Parag Gupta & Associates, (2019) 11 SCC 633, the Supreme Court held that Article 137 of the Schedule to the Limitation Act applies to applications under Sections 7 and 9. The period is three years from the date on which the right to apply accrues, which is the date of default.

“Default” under Section 3(12) means non-payment of a debt when it has become due and payable. For an operational creditor, the date of default is usually the date on which payment under an invoice or contract fell due, not the date of the demand notice under Section 8. A demand notice does not by itself create a fresh date of default.

Section 9 IBC Limitation as a Threshold Issue

Because limitation for a Section 9 IBC application goes to its maintainability, tribunals often decide it first. In Trigger Facility Pvt. Ltd. v. Larsen and Toubro Ltd. (NCLT, Mumbai Bench), as reported, the Tribunal found the operational creditor’s Section 9 application to be time-barred and held that, once the very root of the application was cut by limitation, there was no purpose in examining the other contentions of the parties. The creditor’s argument based on a continuing course of dealings did not, on the evidence, establish a liability within the limitation period.

Multiple Invoices and Running Accounts

Operational claims frequently arise from a series of invoices over several years. In Next Education India Pvt. Ltd. v. K12 Techno Services Pvt. Ltd. (Supreme Court, Civil Appeal No. 1775 of 2021, 27 March 2023), the Court held that the Adjudicating Authority should have considered the invoices falling within the three years preceding the Section 9 application, rather than treating the date of the earliest invoice as the starting point of limitation for the entire claim.

The practical effect is that older invoices may be time-barred while more recent ones remain within limitation. Whether the amount due under the invoices within limitation meets the minimum default of ₹1 crore under Section 4 then becomes a separate question.

Extending Limitation: Acknowledgment and Part Payment

Acknowledgment (Section 18, Limitation Act). A written acknowledgment of liability signed by the corporate debtor, made before the limitation period expires, starts a fresh period of three years. In Laxmi Pat Surana v. Union Bank of India, (2021) 8 SCC 481, the Supreme Court confirmed that Section 18 applies to IBC applications. Entries in balance sheets and written communications may qualify, depending on their content.

Part payment (Section 19, Limitation Act). Where a payment on account of the debt is made by the person liable before the expiry of limitation, a fresh period is computed from the date of payment. In Super Floorings Pvt. Ltd. v. Napin Impex Ltd., Company Appeal (AT) (Insolvency) No. 1928 of 2024 (NCLAT, New Delhi, 3 January 2025), the Appellate Tribunal held that a last payment made within the limitation period, acknowledged in documents such as bank transfer instructions and later correspondence, entitled the operational creditor to the benefit of Section 19.

Pleading. In Babulal Vardharji Gurjar v. Veer Gurjar Aluminium Industries (P) Ltd., (2020) 15 SCC 1, the Supreme Court emphasised that facts relied on to extend limitation must be pleaded. An operational creditor relying on an acknowledgment or part payment should set this out in the application rather than raising it only in reply.

Periods Excluded from Section 9 IBC Limitation

COVID-19 exclusion. In In Re: Cognizance for Extension of Limitation, the Supreme Court, by its order dated 10 January 2022, excluded the period from 15 March 2020 to 28 February 2022 in computing limitation.

Section 10A bar. Section 10A of the IBC provides that no application under Sections 7, 9 or 10 shall ever be filed for initiation of CIRP for any default arising on or after 25 March 2020 and for such further period as notified, which ended on 24 March 2021. A default falling within that window cannot found a Section 9 application, regardless of limitation.

Procedural Changes from 26 May 2026

The Insolvency and Bankruptcy Code (Amendment) Act, 2026 did not change the limitation framework, but several related provisions now affect Section 9 applications:

• Information utility filing. Amended Section 215(3) requires an operational creditor to submit financial information to an information utility before filing under Section 9; under Section 215(4), information not authenticated by the debtor within the specified period is deemed authenticated.
• Decision timeline. The Adjudicating Authority must record reasons if it does not decide the application within fourteen days (proviso to Section 9(5)).
• Accurate disclosure. New Section 67C permits a penalty of not less than ₹1 lakh and up to ₹2 crore where an operational creditor conceals a notified dispute or full and final payment. Disclosure of payments, including part payments relied on for limitation, therefore carries added significance.

Summary

Frequently Asked Questions

What is the limitation period for a Section 9 IBC application?
The limitation period is generally three years from the date of default under Article 137 of the Limitation Act, 1963.

When does limitation start for a Section 9 application?
Limitation generally starts from the date on which the operational debt became due and payable and the default occurred.

Can acknowledgment extend limitation under Section 9 IBC?
Yes. A valid written acknowledgment of liability made before expiry of limitation can provide a fresh three-year period under Section 18 of the Limitation Act.

Does part payment extend limitation under Section 9 IBC?
Yes. Part payment made before expiry of limitation can trigger a fresh limitation period under Section 19 of the Limitation Act.

Are old invoices time-barred under Section 9 IBC?
Not necessarily. In a claim involving multiple invoices, invoices falling within the applicable limitation period may still be considered, subject to the facts and the minimum default requirement.

Legal Information Disclaimer

This article provides general information about Indian law as it stood on 16 September 2026. It is not legal advice, and reading it does not create an advocate–client relationship. Statutes, rules and judicial interpretations change, and their application depends on the facts of each matter. Readers should consult the current official text of the laws and judgments cited and should not act on this information without advice specific to their circumstances. This article is published for legal awareness and education and is not intended to advertise or solicit professional work.

Sources / Authorities

1. Insolvency and Bankruptcy Code, 2016 — Sections 3(12), 4, 8, 9, 10A, 67C, 215, 238A (as amended) — IBBI – Legal Framework
2. Insolvency and Bankruptcy Code (Amendment) Act, 2026 (No. 6 of 2026) — Gazette text (IBBI); Notification S.O. 2625(E) dated 22 May 2026 — IBBI
3. Limitation Act, 1963 — Sections 18 and 19; Article 137 of the Schedule
4. B.K. Educational Services (P) Ltd. v. Parag Gupta & Associates, (2019) 11 SCC 633
5. Babulal Vardharji Gurjar v. Veer Gurjar Aluminium Industries (P) Ltd., (2020) 15 SCC 1
6. Laxmi Pat Surana v. Union Bank of India, (2021) 8 SCC 481
7. In Re: Cognizance for Extension of Limitation, Suo Motu Writ Petition (C) No. 3 of 2020, order dated 10 January 2022
8. Next Education India Pvt. Ltd. v. K12 Techno Services Pvt. Ltd., Civil Appeal No. 1775 of 2021, Supreme Court of India, 27 March 2023 — report, IndiaLaw
9. Super Floorings Pvt. Ltd. v. Napin Impex Ltd., Company Appeal (AT) (Insolvency) No. 1928 of 2024, NCLAT, New Delhi, 3 January 2025 — report, LiveLaw
10. Trigger Facility Pvt. Ltd. v. Larsen and Toubro Ltd., NCLT, Mumbai Bench — summary, IBC Laws