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A pre-existing operational debt dispute over damaged and...

Pre-existing operational debt dispute under IBC: tribunal upholds rejection of insolvency petition where dispute pre-dated demand notice.

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IBC February 2, 2026 Case Laws AT
A pre-existing operational debt dispute over damaged and unreturned shuttering and scaffolding material, and pending reconciliation, was held to bar initiation of insolvency proceedings. Applying Mobilox principles, the tribunal found the debtor's defence-failure to replace or value damaged goods and requests for collection and valuation-plausible and supported by contemporaneous correspondence predating the demand notice; therefore the invoices remained disputed and not admitted. The adjudicating authority was correct to reject the insolvency petition without adjudicating the merits of the defence, and the appeal against that rejection was dismissed.

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Acts Income Tax