Acknowledged liability and absent pre-existing dispute sustained CIRP admission under the Insolvency and Bankruptcy Code.

An acknowledged balance, corroborated by signed statement of accounts and part-payments, was treated as sufficient acknowledgment of liability to save the section 9 application from limitation, which was therefore within time. Unsupported allegations of damaged goods and faulty packing, without contemporaneous documentary proof, were not accepted as a pre-existing dispute capable of defeating admission under the Insolvency and Bankruptcy Code. The commercial record, including purchase orders, invoices, e-way bills, GST material and part-payments, supported supply of goods and subsistence of operational debt. The order admitting the corporate debtor to CIRP was sustained, and the appeal failed.

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Issues: (i) Whether the section 9 application was barred by limitation; (ii) Whether the Corporate Debtor had shown a pre-existing dispute so as to defeat admission of the section 9 petition.

Issue (i): Whether the section 9 application was barred by limitation.

Analysis: The confirmation of accounts signed on behalf of the Corporate Debtor and the record of part-payments showed acknowledgment of liability within the relevant period. The petition was filed after the acknowledged balance and within three years of the material acknowledgment relied upon. The limitation objection was therefore not accepted.

Conclusion: The limitation objection failed and the application was held to be within time.

Issue (ii): Whether the Corporate Debtor had shown a pre-existing dispute so as to defeat admission of the section 9 petition.

Analysis: The record contained purchase orders, invoices, e-way bills, GST-related material, part-payments, and an acknowledged statement of accounts, all supporting supply of goods and subsistence of operational debt. The alleged complaints regarding damaged goods and faulty packing were not supported by contemporaneous documentary proof sufficient to constitute a pre-existing dispute. The documentary record also negatived the claim that no goods were received.

Conclusion: No pre-existing dispute was established, and the section 9 petition was maintainable.

Final Conclusion: The order admitting the Corporate Debtor to CIRP was sustained and the appeal was rejected.

Ratio Decidendi: An acknowledged balance, supported by contemporaneous commercial records and part-payment, can defeat a limitation objection, and unsupported allegations of defective supply do not constitute a pre-existing dispute for resisting admission under section 9 of the Insolvency and Bankruptcy Code, 2016.

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