Pre-existing dispute in insolvency must be documentaryly supported; admission of the section 9 petition was upheld.

Admission of the section 9 insolvency petition was upheld because debt and default were found to be established, while the corporate debtor failed to produce documentary support for any genuine pre-existing dispute. The Appellate Tribunal accepted the Adjudicating Authority's finding that the consultancy agreement was not shown to be void ab initio and that the alleged criminal and civil proceedings did not substantiate the dispute. Later settlement and withdrawal steps did not dislodge the original admission order on the record before the Tribunal, so the challenge to commencement of CIRP failed.

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Issues: Whether the admission of the section 9 insolvency petition and initiation of CIRP suffered from any irregularity warranting interference in appeal.

Analysis: The Appellate Tribunal examined the impugned order and the record to assess whether the Operational Creditor had established debt and default and whether the Corporate Debtor had shown any substantiated pre-existing dispute. It noted that the Adjudicating Authority had found the existence of debt and default, had rejected the plea that the consultancy agreement was void ab initio, and had found no documentary basis for the alleged dispute or the alleged criminal and civil proceedings. The Tribunal also took note of the later settlement and withdrawal proceedings, but found no merit in the challenge to the original admission order on the facts placed before it.

Conclusion: The challenge to the admission of the section 9 petition failed and the impugned order initiating CIRP was upheld.

Ratio Decidendi: An appeal against admission of an insolvency petition will fail where debt and default are established and the alleged pre-existing dispute is not supported by documentary evidence.

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