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        Insolvency and Bankruptcy

        2017 (9) TMI 1077 - Tri - Insolvency and Bankruptcy

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        Section 9 insolvency petition requires proof of notice, affidavit compliance, and no pre-existing dispute before admission. Admission of an operational creditor's section 9 application under the Insolvency and Bankruptcy Code requires strict compliance with statutory ...
                        Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.

                            Section 9 insolvency petition requires proof of notice, affidavit compliance, and no pre-existing dispute before admission.

                            Admission of an operational creditor's section 9 application under the Insolvency and Bankruptcy Code requires strict compliance with statutory conditions, including proof of service of the demand notice, filing of the prescribed affidavit, and absence of a pre-existing dispute. The record did not establish service of the section 8 demand notice on the corporate debtor, the required affidavit was not filed, and the claim related to disputes already pending before the Tribunal. As the dispute pre-dated the notice and the mandatory requirements were not satisfied, the application was not maintainable and was dismissed.




                            Issues: Whether the application under section 9 of the Insolvency and Bankruptcy Code, 2016 was maintainable in view of the absence of proof of service of demand notice, lack of the required affidavit, and the existence of a pre-existing dispute between the parties.

                            Analysis: Admission of an application by an operational creditor under section 9 depends upon compliance with the statutory conditions, including delivery of the demand notice, filing of the prescribed affidavit, and absence of a pre-existing dispute. The record did not show proof of service of the demand notice on the corporate debtor. The operational creditor also did not file the requisite affidavit concerning dispute and compliance. Further, the claim arose out of matters already in dispute before the Tribunal, showing that the dispute existed prior to the notice under section 8. Since the statutory requirements are mandatory, the application could not proceed.

                            Conclusion: The application under section 9 was not maintainable and was rightly dismissed.


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                            ActsIncome Tax
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