Prospective threshold change and unproved pre-existing dispute kept the Section 9 insolvency application maintainable.
A later notification enhancing the minimum default threshold under the insolvency framework was held to operate prospectively, so it did not divest jurisdiction or make a pending Section 9 application non-maintainable. The application was filed when the lower threshold then in force applied, and there was no indication of retrospective intent. The plea of pre-existing dispute also failed because no timely or cogent material was produced in response to the statutory demand notice, despite an admitted business relationship and earlier payments. The appeal therefore failed on both grounds, and the admission order initiating insolvency proceedings was sustained.
Issues: (i) Whether the minimum default threshold notified during pendency of a Section 9 insolvency application deprived the adjudicating authority of jurisdiction to proceed with the pending application; (ii) Whether the operational creditor's application was barred by a pre-existing dispute under the statutory demand notice framework.
Issue (i): Whether the minimum default threshold notified during pendency of a Section 9 insolvency application deprived the adjudicating authority of jurisdiction to proceed with the pending application.
Analysis: The pending application was filed when the lower threshold then in force applied. The later notification enhancing the minimum default amount was held to be prospective in operation and not retrospective. The reasoning adopted was that the notification did not express any retrospective intent and could not be construed to unsettle applications already instituted.
Conclusion: The change in threshold did not divest jurisdiction or render the pending application not maintainable; the contention was rejected.
Issue (ii): Whether the operational creditor's application was barred by a pre-existing dispute under the statutory demand notice framework.
Analysis: The demand notice under Section 8 was served, but no timely dispute was raised in response. No satisfactory evidence of a pre-existing dispute was produced before the adjudicating forum, while the record indicated an admitted business relationship and earlier payments. The dispute raised in appeal was treated as a factual plea unsupported by material on record.
Conclusion: No pre-existing dispute was established, and the application under Section 9 was maintainable.
Final Conclusion: The appeal failed on both grounds and the admission order initiating insolvency proceedings was sustained.
Ratio Decidendi: A later notification enhancing the minimum default threshold under the insolvency regime operates prospectively and does not defeat a pending Section 9 application, and a pre-existing dispute must be supported by timely and cogent material in response to the statutory demand notice.
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