Pre-existing dispute under insolvency law bars Section 9 admission where genuine supply and quality grievances existed earlier.

An application under the Insolvency and Bankruptcy Code was rejected because the record showed a real pre-existing dispute before the demand notice. Email exchanges and correspondence evidenced complaints about mismatch of goods, replacement issues, short supply, delayed supply, and quality deficiencies, showing the dispute was not an afterthought. Applying the settled test for Section 9, the adjudicating authority must refuse admission where a genuine and plausible dispute exists. On that basis, the petition was held not maintainable and dismissed.

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Issues: Whether the application under Section 9 of the Insolvency and Bankruptcy Code, 2016 was liable to be admitted in view of the alleged pre-existing dispute between the parties.

Analysis: The material on record, including email exchanges and correspondence, showed repeated complaints regarding mismatch of goods, replacement of materials, short supply, delayed supply, and quality-related grievances preceding the demand notice. These documents indicated that the dispute was not a mere afterthought and had arisen prior to invocation of insolvency proceedings. Applying the settled test that the adjudicating authority must reject a Section 9 application where there is a real and plausible dispute, the existence of such dispute was sufficient to bar admission of the petition.

Conclusion: The application under Section 9 was not maintainable and was dismissed in favour of the corporate debtor.

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