Operational debt and default upheld under the IBC where no genuine pre-existing dispute was shown before the demand notice.

A Section 9 Insolvency and Bankruptcy Code application was held maintainable where operational debt and default were shown and no genuine pre-existing dispute had been communicated before the demand notice or petition. The operational creditor relied on the memorandum of understanding, invoices, correspondence on monthly charges and property tax, and the statutory demand notice. The corporate debtor's objections on absence of debt, restricted access, inadequate stamping, termination, and arbitration were not substantiated by evidence. The application was admitted, CIRP was ordered, and the plea of pre-existing dispute was rejected.

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Issues: Whether the application under Section 9 of the Insolvency and Bankruptcy Code, 2016 was maintainable and liable to be admitted in the absence of a pre-existing dispute and upon proof of default in payment of operational debt.

Analysis: The Operational Creditor relied on the Memorandum of Understanding, invoices, correspondence concerning monthly charges and property tax, and the statutory demand notice issued under Section 8 of the Insolvency and Bankruptcy Code, 2016. The Corporate Debtor attempted to resist admission by alleging want of debt, alleged restriction of access to the premises, insufficiency of stamping, termination of the arrangement, and invocation of arbitration. The application of the insolvency framework required the Adjudicating Authority to examine whether an operational debt existed, whether default had occurred, and whether there was any genuine pre-existing dispute communicated before the petition. On the materials placed, the alleged disputes were not substantiated by evidence and no prior dispute or effective termination notice was shown to have been served before initiation of proceedings.

Conclusion: The application under Section 9 of the Insolvency and Bankruptcy Code, 2016 was admitted, CIRP was ordered, and the plea of pre-existing dispute was rejected.

Ratio Decidendi: A Section 9 application is admissible where operational debt and default are established and no genuine pre-existing dispute is shown to exist prior to the demand notice and petition.

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