Operational debt must be clearly proved before insolvency; inconsistent claim amounts can defeat section 9 admission.

An application under section 9 of the Insolvency and Bankruptcy Code must be founded on a clear, satisfactorily proved operational debt that is due and unpaid. Where the bill, demand notice, and supporting records show inconsistent amounts, and the documentary basis for the principal liability is not established, the claim does not meet the admission threshold. The Code cannot be used as a recovery tool for an unsubstantiated alleged outstanding amount. On the material described, the section 9 application was not fit for admission and was liable to be dismissed.

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Issues: Whether the application under section 9 of the Insolvency and Bankruptcy Code, 2016 was maintainable in the absence of a satisfactorily established operational debt and in the face of material discrepancies in the amount claimed, and whether the proceedings were in substance an attempt to recover an alleged outstanding amount.

Analysis: The claim was supported only by a bill and the admitted advance payment, but the amounts asserted in the petition, demand notice, and supporting material were inconsistent. The documentary basis for the exact principal liability was not satisfactorily established, and the material placed did not conclusively show that the claimed debt was due and payable in the manner asserted. The threshold under section 9 requires a clear operational debt, due and unpaid, and the Code cannot be used as a recovery mechanism where the claim itself remains unsubstantiated.

Conclusion: The application under section 9 was not fit for admission and was liable to be dismissed.

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