Operational creditor admission turns on valid notice, no credible pre-existing dispute, limitation, and complete insolvency application.
A demand notice under the insolvency framework is effective where it is sent by registered post and e-mail and the record shows dispatch and tracking, and a bare allegation of dissatisfaction with supply or quality is insufficient to establish a credible pre-existing dispute. A payment made before expiry of the prescribed period can trigger a fresh limitation period in a running-account context, keeping the application within time. Where the operational debt remains unpaid, the notice is duly served, default is shown, the application is complete, and the proposed interim resolution professional has given consent, the statutory conditions for admission of the application and commencement of corporate insolvency resolution process are satisfied.
Issues: (i) Whether the demand notice under the insolvency framework was duly served on the corporate debtor and whether any pre-existing dispute was established. (ii) Whether the application was within limitation in view of the last payment and the nature of the running account. (iii) Whether the requirements for admission of the application and commencement of corporate insolvency resolution process were satisfied.
Issue (i): Whether the demand notice under the insolvency framework was duly served on the corporate debtor and whether any pre-existing dispute was established.
Analysis: The notice was sent by registered post and e-mail to the corporate debtor and its directors, and the record showed dispatch and tracking details. The response alleging dissatisfaction with supply and quality was unsupported by any contemporaneous communication or material. On the record, there was no proven dispute capable of defeating the application.
Conclusion: The demand notice was duly served and no pre-existing dispute was proved.
Issue (ii): Whether the application was within limitation in view of the last payment and the nature of the running account.
Analysis: The last payment was treated as having been made on 07.03.2017, and the application was filed on 15.10.2019. The adjudicating authority applied the principle that a payment made before expiry of the prescribed period gives rise to a fresh period of limitation. On that basis, the claim was held to be in time.
Conclusion: The application was within limitation.
Issue (iii): Whether the requirements for admission of the application and commencement of corporate insolvency resolution process were satisfied.
Analysis: The application was found complete, the unpaid operational debt stood established, the statutory notice had been served, and the existence of default was shown. The operational creditor also proposed an interim resolution professional, and consent was placed on record. The statutory conditions for admission were therefore satisfied.
Conclusion: The application was admitted and corporate insolvency resolution process was commenced against the corporate debtor.
Final Conclusion: The adjudicating authority accepted the operational creditor's claim, rejected the objections on notice, dispute, and limitation, and initiated insolvency proceedings with appointment of the proposed interim resolution professional and consequential moratorium.
Ratio Decidendi: An application by an operational creditor is admissible where the demand notice is duly served, no credible pre-existing dispute is established, the claim is within limitation, and the statutory requirements for default and completeness of the application are satisfied.
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