Pre-existing operational dispute defeats CIRP admission where invoices, charges, and interest were contested under the insolvency code.

An operational creditor must show an undisputed operational debt and default before invoking CIRP under the Insolvency and Bankruptcy Code, 2016. Where invoices were raised after the contractual period expired and the corporate debtor repeatedly objected to the basis of charging, the interest rate, and the minimum chargeable copies, the existence of a genuine pre-existing dispute prevented admission of a Section 9 petition. The Tribunal noted that insolvency proceedings are not a substitute for recovery proceedings and that summary proceedings under the Code do not require a roving enquiry once a real dispute is shown. On these facts, the application was rejected.

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Issues: Whether the operational creditor established an undisputed operational debt and default so as to invoke the corporate insolvency resolution process under Section 9 of the Insolvency and Bankruptcy Code, 2016, despite the corporate debtor's objections and alleged pre-existing dispute.

Analysis: The claim arose from invoices issued after the contractual period had expired and the parties disputed both the basis of charging and the amount payable. The corporate debtor had raised repeated objections by email and contended that the bills were inconsistent with the agreement, including the rate of interest and the minimum chargeable copies. The existence of such disputes showed that the debt was not admitted and required no roving enquiry in a summary proceeding under the Code. The Tribunal reiterated that insolvency proceedings cannot be used as a substitute for recovery proceedings and that an undisputed operational debt is necessary before CIRP can be initiated.

Conclusion: The petitioning operational creditor failed to establish a fit case for admission under Section 9 of the Insolvency and Bankruptcy Code, 2016, and the application was rejected.

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