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Issues: Whether the section 9 insolvency petition was maintainable where the claim suffered from inconsistencies in invoices, date of default, and quantification, and where the principal dispute centred on interest not stipulated in the contract and on the operational creditor's MSME status.
Analysis: The claim was found to be internally inconsistent, since the petition and statement of claim did not match on the invoices relied upon, the date of default, and the amount claimed. The invoices and purchase orders did not provide for interest, and the petition's interest claim shifted from an alleged industry practice rate to a claim linked to MSME law. The Corporate Debtor was not informed of the MSME status when the demand notice was issued, which was treated as suppression of a material fact. In these circumstances, the petition was viewed as a claim driven substantially by interest and not as a clear case for triggering CIRP. The order also recognised that any MSME-related interest dispute could be pursued before the Facilitation Council.
Conclusion: The petition was not maintainable for initiation of CIRP and was rejected.
Ratio Decidendi: A section 9 petition cannot be used to trigger insolvency where the operational debt and default are not clearly quantified, the interest component is unsupported by contract, and material facts affecting the claim have been withheld; such a claim does not justify CIRP.
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