Under Section 3(12) of the Insolvency and Bankruptcy Code, 2016, does the mere subsistence of an EPC contract, whose obligations remain unfulfilled, provide the operational creditor a continuing cause of action that keeps its claim within limitation indefinitely?

No. Default under Section 3(12) occurs at a singular point in time when the debt becomes due and payable and is not paid, and an unpaid debt causing continuous damage does not amount to a continuing legal injury; the subsistence of the contract does not itself provide a continuing cause of action.

Insolvency and Bankruptcy Code, 2016 — s.9 — s.3(12) — s.5(21) — Operational debt — Pre-existing dispute — Limitation — Effluxion of time — Frustration of contract — Indian Contract Act, 1872 — s.56 — Insolvency and Bankruptcy Code, 2016 — s.3(12) — "Default" — Continuing cause of action — Limitation Act, 1963 — s.18 — Acknowledgment — Held: Default under Section 3(12) occurs at a singular point in time when debt becomes due, payable and unpaid, not a continuing cause of action; absent acknowledgment under Section 18, Limitation Act, 1963, legal notices could not reset limitation, and the application was time-barred. (¶72, 82, 100) Insolvency and Bankruptcy Code, 2016 — s.9 — Effluxion of time — Frustration of contract — Self-induced frustration — Held further: Effluxion of time describes a contract's natural close, and frustration requires a supervening impossibility, not self-induced frustration arising from a party's own election; neither party having terminated it, the EPC contract continued to subsist. (¶40, 44, 47) Insolvency and Bankruptcy Code, 2016 — s.5(21) — Operational debt — Pre-existing dispute — Genuineness — Held further: Amounts under the EPC contract's payment schedule qualified as operational debt, though suspension and demobilization charges remained damages until assessed and crystallized by adjudication; the appellant's total, consistent silence across every legal notice showed no dispute that was spurious, hypothetical or illusory, so no pre-existing dispute barred the claim. (¶54, 60, 64, 93, 96) Insolvency and Bankruptcy Code, 2016 — s.9 — Appeal allowed — Liberty granted — Held further: The appeal was allowed and the NCLAT's and NCLT's orders admitting the Section 9 application were set aside; liberty was given to the respondent to approach the appropriate dispute resolution forum under the EPC contract to contest its claims. (¶101, 102)

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