Pre-existing dispute must be real and prior to demand notice before it can bar insolvency admission.

An application under section 9 of the Insolvency and Bankruptcy Code was found maintainable because the record showed supply of goods, invoices, part-payments, and acknowledgments of liability, establishing operational debt and default. The alleged dispute failed because it was not backed by material showing a real controversy existing before the demand notice, and a later reply to the section 8 notice could not by itself create a pre-existing dispute. The compromise deed and settlement order further supported the creditor's case, and the documentary requirements under section 9(3)(c) were satisfied, so admission of the insolvency application was warranted.

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Issues: Whether the application under section 9 of the Insolvency and Bankruptcy Code, 2016 was complete and admissible, and whether a genuine pre-existing dispute existed so as to bar admission.

Analysis: The record showed supply of goods, invoices raised, part-payments made, and subsequent acknowledgments of liability. The alleged dispute was not supported by material showing a real controversy existing before the demand notice. The later reply to the section 8 notice could not by itself establish a pre-existing dispute. The compromise deed and the order recording settlement further supported the operational creditor's case. The application also satisfied the documentary requirements under section 9(3)(c), and the debt and default were found established beyond doubt.

Conclusion: The application was held to be maintainable and the pre-existing dispute defence failed; admission of the insolvency application was warranted.

Ratio Decidendi: For admission under section 9, the adjudicating authority must reject only a dispute that is real, pre-existing, and supported by plausible material; a subsequent or spurious defence does not bar admission once operational debt, default, and procedural compliance are established.

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