Underlying Contract’s Subsistence Cannot Revive Time-Barred Debt Under IBC: Supreme Court
Case Title : Srinivasa Reddy Velagala v. Sravanthi Infratech Pvt Ltd
Case Number : Civil Appeal No. 876 of 2021
CITATION : 2026 LLBiz SC 272
The Supreme Court on Wednesday held that the mere subsistence of an underlying contract cannot give a creditor a continuing cause of action for an IBC default that has already occurred. It consequently ruled that a time-barred debt cannot be revived through insolvency proceedings. Justices J.B. Pardiwala and Manoj Misra held that the operational creditor’s claims had crystallized in 2012, but it failed to pursue them within three years. The Court held that the insolvency application filed in 2018 was…