Pre-existing dispute under insolvency law must be shown before the demand notice; later claims do not block section 9 admission.

A section 9 insolvency application is not barred by a claimed dispute unless the dispute existed before the demand notice or invoice was received and is supported by contemporaneous material. Here, the alleged defects in goods, return of stock, and accounting adjustments were unsupported by prior correspondence, complaint, debit note, rejection memo, or matching laboratory evidence. Later mediation and civil proceedings did not amount to pre-existing disputes, and post-notice part-payments further indicated unpaid operational debt and default. The section 9 application was therefore admitted, the CIRP initiation was sustained, and the appeal failed.

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Issues: Whether the operational creditor's section 9 application was liable to be rejected on the ground of a genuine pre-existing dispute regarding quality of goods, return of defective stock, and accounting adjustments.

Analysis: The dispute of defective consignments was found unsupported by credible contemporaneous material. The laboratory reports did not match the invoices said to be defective, the quality checks were undertaken belatedly, and no prior correspondence, complaint, debit note, or rejection memo was shown before the demand notice. The alleged mediation and civil proceedings were initiated after the demand notice and therefore did not qualify as pre-existing disputes. Part-payments made after notice and the absence of any prior categorical denial of liability also supported the existence of unpaid operational debt and default.

Conclusion: The alleged dispute was not a real pre-existing dispute, and the section 9 application was rightly admitted. The appeal failed.

Final Conclusion: The initiation of CIRP against the corporate debtor was sustained, and the appeal was dismissed.

Ratio Decidendi: A dispute can defeat an application under section 9 only if it is shown to have existed before the demand notice or invoice was received; disputes raised later, without contemporaneous supporting material, do not bar admission of the insolvency application.

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