Pre-existing dispute under insolvency law must be evidenced before the demand notice; unsupported correspondence did not defeat admission.

A pre-existing dispute under the Insolvency and Bankruptcy Code must be supported by credible evidence before service of the demand notice to defeat a Section 9 application. The appellants relied on correspondence and a meeting minute alleging defective supply, but the record did not show proof of dispatch or service of the letters and notice, and those materials were not even referred to in the reply to the Section 8 demand notice. On that basis, the asserted dispute was not established as pre-existing, and the admission of the Section 9 application was upheld against the appellants.

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Issues: Whether the appellants established a pre-existing dispute so as to defeat admission of the respondent's application under Section 9 of the Insolvency and Bankruptcy Code, 2016.

Analysis: The appellants relied on correspondence and a meeting minute to show a dispute regarding the quality of material supplied. The evidence did not show proof of dispatch or service of the letters and notice relied upon, and those documents were not even referred to in the reply to the demand notice under Section 8 of the Insolvency and Bankruptcy Code, 2016. A plea of pre-existing dispute must be supported by evidence, and the material placed on record did not establish any such dispute before service of the demand notice.

Conclusion: The plea of pre-existing dispute failed, and the order admitting the Section 9 application was upheld, against the appellants.

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