Operational debt backed by acknowledgment of dues defeated a pre-existing dispute and limitation challenge in insolvency proceedings.

An operational debt arising from supply and installation work was supported by invoice records, TDS deduction, and a written acknowledgment of dues promising payment, so the later objections on defective performance and non-certification of bills did not establish a genuine pre-existing dispute. The tribunal treated the claim as within limitation because the acknowledgment of liability displaced the debtor's limitation objection on the facts. A section 9 application was therefore maintainable and was admitted, with commencement of corporate insolvency resolution process, appointment of an interim resolution professional, and declaration of moratorium.

---

---

Issues: Whether the section 9 petition for initiation of corporate insolvency resolution process was maintainable in the absence of a pre-existing dispute and whether the claim was barred by limitation.

Analysis: The Operational Creditor's claim arose from supply and installation work under the work order and invoice raised in November 2016. The record showed deduction of TDS, a reply dated 13.03.2018 acknowledging the dues and assuring payment within 30 days, and a later demand notice under the Insolvency and Bankruptcy Code. The objections based on alleged defective performance, non-certification of bills, and limitation were found not persuasive on the facts, as the dispute raised later did not displace the earlier acknowledgment of liability and the petition was treated as within limitation. The materials relied upon by the Corporate Debtor were held to be inapplicable to the case at hand.

Conclusion: The petition under section 9 was maintainable, no bona fide pre-existing dispute was established, and the application was admitted for commencement of corporate insolvency resolution process.

Final Conclusion: Insolvency proceedings were directed to commence against the Corporate Debtor with appointment of an interim resolution professional and declaration of moratorium.

Ratio Decidendi: Where an operational debt is supported by acknowledgment of dues and the debtor fails to establish a genuine pre-existing dispute, a section 9 application is liable to be admitted.

---