Section 9 insolvency admission turns on proved service, acknowledged debt, and absence of any genuine pre-existing dispute.

Service of the demand notice and section 9 application was accepted where dispatch was proved, a board resolution authorised the representative, and an advocate could validly issue the notice; the application was also complete and properly signed. A limitation objection based on older invoices failed because six cheques issued later constituted acknowledgment of liability, extending limitation. Operational debt and default were established from supply of goods and non-payment of admitted dues, while the alleged missing cheques and stop-payment instructions were unsupported and no credible pre-existing dispute existed. The insolvency application was therefore admitted, CIRP commenced, and moratorium followed.

---

---

Issues: (i) whether the demand notice and the application under section 9 were duly served and validly authorised, (ii) whether the claim was barred by limitation in view of the alleged 2013 invoices, and (iii) whether operational debt, default and absence of a pre-existing dispute were established so as to admit the insolvency application.

Issue (i): whether the demand notice and the application under section 9 were duly served and validly authorised

Analysis: The proof of dispatch showed service of the demand notice on the corporate debtor. The record also contained a board resolution authorising the concerned representative to file the petition, and the use of an advocate to issue the demand notice was held to be permissible. The application was found to be properly signed and complete.

Conclusion: The objection to service and authorisation was rejected.

Issue (ii): whether the claim was barred by limitation in view of the alleged 2013 invoices

Analysis: The corporate debtor had issued six cheques in 2015 towards the dues, which amounted to acknowledgment of liability. That acknowledgment extended the period of limitation and negatived the plea that the claim arising from the earlier invoices was time-barred.

Conclusion: The claim was held to be within limitation.

Issue (iii): whether operational debt, default and absence of a pre-existing dispute were established so as to admit the insolvency application

Analysis: The materials on record showed supply of goods, non-payment of the admitted dues, and no credible pre-existing dispute. The version of missing cheques and stop-payment instructions was found unsupported and inconsistent. The statutory requirements for admission under section 9 were therefore satisfied, and moratorium followed on admission of the application.

Conclusion: Operational debt and default were established and the application was admitted.

Final Conclusion: The insolvency petition was admitted, CIRP was initiated, and moratorium was ordered against the corporate debtor.

Ratio Decidendi: A section 9 application is maintainable where service of demand notice is proved, the claim is within limitation by reason of acknowledgment of debt, and there is no genuine pre-existing dispute; upon satisfaction of these conditions, the application must be admitted and moratorium follows.

---