Section 9 insolvency claims must reflect correct credit periods, no pre-existing dispute, and non-fatal notice-petition amount differences.

Under the Insolvency and Bankruptcy Code, the correct contractual credit period must be applied invoice-wise when computing the default date and the Section 10A barred amount; invoices from the Indian warehouse were subject to a 40-day period, and the misapplication of a 90-day period distorted the exclusion calculation. A pre-existing dispute was not established because the relied-upon tripartite arrangement and later email arose after default and after the Section 8 demand. A mismatch between the demand notice amount and the Section 9 claim was not fatal where it was explained by part-payments and contractual interest and the operational debt remained above the statutory threshold.

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Issues: (i) whether the adjudicating authority correctly applied Section 10A of the Insolvency and Bankruptcy Code, 2016 while computing the date of default and the amount excluded from the insolvency petition; (ii) whether a pre-existing dispute existed so as to defeat the Section 9 application; and (iii) whether the difference between the amount stated in the demand notice under Section 8 and the amount claimed in the Section 9 petition rendered the application invalid.

Issue (i): whether the adjudicating authority correctly applied Section 10A of the Insolvency and Bankruptcy Code, 2016 while computing the date of default and the amount excluded from the insolvency petition.

Analysis: The credit period under the dealership arrangement was not uniform for all invoices. Invoices relating to goods supplied from the Indian warehouse were governed by a 40-day credit period, while only invoices for goods supplied after import attracted a 90-day period. The exclusionary computation adopted below treated certain Indian-warehouse invoices as if they carried a 90-day period, which distorted the default date and the amount said to fall within the Section 10A window. On the correct contractual construction, the unpaid amount remaining outside the barred period crossed the statutory threshold.

Conclusion: The Section 10A computation was and the claim could not be rejected on that basis.

Issue (ii): whether a pre-existing dispute existed so as to defeat the Section 9 application.

Analysis: The alleged dispute arose from a tripartite arrangement executed after the default had already occurred. No reply to the demand notice was shown, and the later email relied upon by the adjudicating authority related to a distinct transaction and was sent long after the notice under Section 8. Such post-default material did not establish a dispute existing before the insolvency demand.

Conclusion: No pre-existing dispute was established for the purpose of rejecting the Section 9 application.

Issue (iii): whether the difference between the amount stated in the demand notice under Section 8 and the amount claimed in the Section 9 petition rendered the application invalid.

Analysis: The discrepancy was explained by part-payments made after the demand notice and by the addition of contractual interest in the petition. Where the operational debt otherwise remained above the statutory threshold, a variation between the notice amount and the petition amount did not by itself vitiate the application.

Conclusion: The mismatch in figures did not justify dismissal of the Section 9 petition.

Final Conclusion: The dismissal of the insolvency application was unsustainable, and the matter required fresh consideration before the adjudicating authority.

Ratio Decidendi: For deciding a Section 9 application, the contractual credit period and the correct default date must be applied to each invoice, and a post-default arrangement or later communication does not establish a pre-existing dispute; a difference between the demand notice amount and the petition amount is not fatal if the operational debt otherwise remains above the statutory threshold.

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