Section 9 insolvency threshold not met, so the operational creditor's application could not proceed.

An application under section 9 of the Insolvency and Bankruptcy Code, 2016 was held not maintainable because the admitted operational debt was below the threshold required to initiate insolvency proceedings. The payable amount was found to be less than the prescribed limit notified for such proceedings, so the statutory condition for admission was not satisfied. The operative principle is that a section 9 application cannot proceed unless the operational debt meets the applicable threshold amount.

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Issues: Whether an application under section 9 of the Insolvency and Bankruptcy Code, 2016 was maintainable where the operational debt claimed was below the prescribed threshold amount for initiating insolvency proceedings.

Analysis: The admitted amount payable to the operational creditor was Rs. 13,46,278/-, which was below the threshold amount of Rs. 1 crore notified for initiation of insolvency proceedings by Notification No. S.O. 1205(E) dated 24.03.2020. Since the debt did not satisfy the statutory threshold, the application could not be entertained.

Conclusion: The insolvency petition was not maintainable.

Ratio Decidendi: An application under section 9 of the Insolvency and Bankruptcy Code, 2016 cannot be maintained unless the operational debt meets the threshold amount prescribed for initiation of insolvency proceedings.

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