Pre-existing dispute bars Section 9 insolvency admission when statutory filing requirements are not satisfied.

An operational creditor's Section 9 application under the Insolvency and Bankruptcy Code was rejected because a pre-existing dispute existed and the statutory admission requirements were not satisfied. The corporate debtor had disputed the liability in responses to prior notices and the demand notice, while the creditor's own financial statements and write-off of the claim as bad debt supported the existence of that dispute. As the affidavit and bank-certificate requirements were also not satisfactorily met, the application failed the threshold for admission and was held not maintainable.

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Issues: Whether the operational creditor's application under Section 9 of the Insolvency and Bankruptcy Code, 2016 was liable to be admitted when the corporate debtor had raised a dispute and the statutory affidavit requirements were not satisfactorily met.

Analysis: The application was examined in the light of the statutory requirements for initiating the insolvency resolution process by an operational creditor, including the demand notice, the affidavit required under Section 9(3)(b), the bank certificate contemplated by Section 9(3)(c), and the consequence of a notice of dispute under Section 9(5)(ii). The record showed that the corporate debtor had disputed the liability in reply to the earlier notice under the Companies Act as well as in response to the demand notice under the Code. The petitioner's own financial statements and the write-off of the claimed amount as bad debt were treated as material circumstances supporting the existence of a dispute. On that basis, the application did not satisfy the threshold for admission under Section 9.

Conclusion: The application under Section 9 was not maintainable for admission and was rejected.

Final Conclusion: The alleged operational debt could not be used to trigger insolvency proceedings because a genuine dispute existed between the parties and the statutory preconditions for admission were not fulfilled.

Ratio Decidendi: Where the corporate debtor shows a pre-existing dispute and the statutory preconditions under Section 9 are not satisfied, an operational creditor's application for insolvency resolution must be rejected.

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