Operational debt and absence of dispute justify admission of a Section 9 insolvency application and moratorium.

Operational debt and default were found to be supported by demand notice, invoices, bank records and an MSME Council payment order, while the corporate debtor raised no reply or pre-existing dispute. On that documentary basis, the Tribunal held that the statutory requirements for initiation of corporate insolvency resolution process under Section 9 of the Insolvency and Bankruptcy Code were satisfied. The application was admitted, moratorium under Section 14 followed, public announcement under Section 13 was directed, and the proposed Interim Resolution Professional was appointed.

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Issues: Whether the operational creditor established default and entitlement to admission of the application under Section 9 of the Insolvency and Bankruptcy Code, 2016, and consequentially whether moratorium and appointment of an Interim Resolution Professional were warranted.

Analysis: The record showed issuance of demand notice, supporting invoices and bank statement, along with an order of the Micro and Small Enterprises Facilitation Council directing payment of the admitted dues. No reply was filed to the demand notice and no dispute was raised by the corporate debtor. The Tribunal found documentary support for the outstanding operational debt and default, and was satisfied that the statutory requirements for initiation of corporate insolvency resolution process were met. On that basis, moratorium under Section 14 followed, public announcement under Section 13 was directed, and the proposed Interim Resolution Professional was appointed.

Conclusion: The application under Section 9 was admitted, moratorium was imposed, and the Interim Resolution Professional was appointed in favour of the operational creditor.

Ratio Decidendi: Where operational debt and default are supported by documents and no pre-existing dispute is shown, an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 is liable to be admitted and moratorium under Section 14 follows.

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