Registered-office service, limitation, and no real pre-existing dispute sustained section 9 admission of the insolvency application.

Service of a section 8 demand notice at the corporate debtor's registered office as reflected in MCA master data satisfied the prescribed mode of service, and the identity of the person who physically received it was immaterial. The operational debt was held to be within limitation because the transaction was treated as a running account and the relevant default date fell within three years of filing. No pre-existing dispute was found, as a valid dispute must be real, plausible, and supported by material rather than bare denial or unrelated allegations. The section 9 admission order was therefore upheld.

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Issues: (i) whether the demand notice under section 8 of the Insolvency and Bankruptcy Code, 2016 was duly served; (ii) whether the operational creditor's claim was barred by limitation; (iii) whether there was any pre-existing dispute so as to defeat admission of the section 9 application.

Issue (i): whether the demand notice under section 8 of the Insolvency and Bankruptcy Code, 2016 was duly served.

Analysis: Service of the demand notice at the registered office recorded in the corporate debtor's MCA master data satisfied the mode of service prescribed by rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. Once the notice was properly addressed and delivered to the registered office, the identity of the person who physically received it was held to be immaterial. Receipt by a director further supported service.

Conclusion: The demand notice was held to have been duly and sufficiently served.

Issue (ii): whether the operational creditor's claim was barred by limitation.

Analysis: The tribunal treated the transaction as a running account and relied on the last part-payment to hold that the debt became due and payable on the date of such payment. Applying the law on limitation under the Insolvency and Bankruptcy Code, a section 9 application cannot revive a time-barred debt, but where the default date falls within three years of filing, the claim is within time. On the facts, the date of default was taken as 22.09.2016 and the application was filed in October 2018.

Conclusion: The claim was held to be within limitation.

Issue (iii): whether there was any pre-existing dispute so as to defeat admission of the section 9 application.

Analysis: A dispute must be a real and plausible contention supported by material and not a feeble or illusory defence. Mere bald denial, unsupported allegations that invoices were fabricated, and reliance on unrelated transactions with group companies did not establish a pre-existing dispute concerning the operational debt in question.

Conclusion: No pre-existing dispute was found.

Final Conclusion: The admission order under section 9 was upheld, as the operational creditor established service of demand notice, a subsisting operational debt and default, and the absence of any genuine pre-existing dispute.

Ratio Decidendi: Service of a section 8 demand notice at the registered office in the manner prescribed by rule 5 is sufficient, limitation runs from the legally relevant default date in a running account transaction, and admission under section 9 is barred only by a real pre-existing dispute supported by material.

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