Operational debt under insolvency law remains enforceable despite a later arbitration appeal where no dispute notice was raised.

An operational creditor's section 9 insolvency application was found maintainable where the debt arose from services under a contract, was supported by an arbitral award that had survived section 34 challenge, and the debtor failed to pay or issue a notice of dispute after service of the section 8 demand notice. The record satisfied the procedural requirements for admission, including the bank certificate and affidavit showing non-payment and absence of dispute. Pendency of a section 37 appeal against the award, filed after the demand notice, did not negate operational debt or amount to a pre-existing dispute under the Code, and the application was admitted for commencement of CIRP.

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Issues: Whether the operational creditor had proved a default and complied with the requirements for admission of an application under section 9 of the Insolvency and Bankruptcy Code, 2016, and whether the pendency of an appeal under section 37 of the Arbitration and Conciliation Act, 1996 against an arbitral award prevented admission of the insolvency petition.

Analysis: The claim arose from services rendered under a contract, and the amount due was supported by an arbitral award which had already withstood challenge under section 34 of the Arbitration and Conciliation Act, 1996. The demand notice under section 8 of the Insolvency and Bankruptcy Code, 2016 was served, and the corporate debtor did not make payment or raise a notice of dispute within the statutory period. The record also showed compliance with the procedural requirements under section 9, including the bank certificate and affidavit evidencing non-payment and absence of dispute. The pendency of an appeal under section 37, filed after service of the demand notice, did not negate the existence of operational debt or amount to a valid pre-existing dispute for the purpose of section 8 of the Code.

Conclusion: The section 9 application was held maintainable and was admitted for commencement of the corporate insolvency resolution process.

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