Petition u/s 9 of IBC In Absence of Pre-Existing Dispute can be Admitted on Proven Debt & Default: NCLAT

The National Company Law Appellate Tribunal (NCLAT) has ruled that a petition under Section 9 of the Insolvency and Bankruptcy Code (IBC) can be admitted in the absence of a pre-existing dispute if there is proven debt default. The case involved a creditor who filed a petition against a debtor for non-payment of dues. The debtor argued that there was a pre-existing dispute, but the NCLAT found no evidence to support this claim. The tribunal emphasized that the primary requirement for admitting a petition under Section 9 is the existence of a debt and default. It clarified that the absence of a pre-existing dispute strengthens the creditor’s case for initiating insolvency proceedings. This ruling reinforces the IBC’s objective of providing a time-bound resolution for insolvency cases and ensuring that genuine creditors can seek redressal without undue delays.