Pre-existing dispute must be genuine to defeat a section 9 insolvency claim; admitted liability supported CIRP commencement.

An operational creditor's section 9 application was held maintainable where the debtor's quality complaints did not amount to a genuine pre-existing dispute. The record showed acknowledgement of liability and a settlement proposal for an admitted amount, while default remained established and no effective settlement was reached. The application was also found complete and within limitation, satisfying the statutory requirements for initiation of insolvency proceedings. The objection based on pre-existing dispute was rejected, the petition was admitted, and CIRP was directed to commence with moratorium and appointment of an interim resolution professional.

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Issues: Whether the operational creditor's application under section 9 was maintainable despite the alleged pre-existing dispute, and whether the corporate debtor's default entitled the creditor to admission of the petition and commencement of CIRP.

Analysis: The pleadings and correspondence showed that the corporate debtor attempted to rely on quality complaints as a dispute, but the record also disclosed acknowledgement of liability and a settlement proposal for payment of an admitted amount. The dispute raised was not sufficient to dislodge the operational creditor's claim where default remained established and no effective settlement was reached. The application was also found to be complete and within limitation, satisfying the statutory requirements for initiation of insolvency proceedings.

Conclusion: The objection of pre-existing dispute was rejected, and the petition was held maintainable. CIRP was directed to commence against the corporate debtor, with moratorium to follow and an interim resolution professional appointed.

Final Conclusion: The insolvency application was admitted and insolvency proceedings were set in motion against the corporate debtor.

Ratio Decidendi: A section 9 application is admissible where default is established and the alleged dispute does not constitute a genuine pre-existing dispute sufficient to defeat the operational creditor's claim.

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