#Section 9 IBC

The NCLAT ruled that when a corporate debtor formally acknowledges an operational debt through a consequence sheet-despite prior claims of defective supply-the acknowledgment nullifies the assertion of a pre-existing dispute. This clarifies that conditional or reconciliatory admissions under commercial correspondence can constitute unequivocal liability under IBC, empowering operational creditors to initiate CIRP even amid ongoing contractual disagreements.

NCLAT clarifies that a joint venture partner can initiate insolvency proceedings under Section 9 IBC if its supply obligations are governed by a separate agreement, independent of profit-sharing arrangements. This ruling expands the scope of operational creditors, impacting joint venture contracts and insolvency filings.

The NCLAT has ruled that interest charged in invoices cannot be included in the operational debt threshold under Section 9 of the IBC unless there is a clear contractual provision or established past practice of accepting such interest. This sets a critical precedent for operational creditors relying on invoice terms alone, requiring explicit consent for interest to count toward the ₹1 lakh threshold.

The Supreme Court ruled that a pre-existing dispute over defective supplies and account reconciliation, if plausible and not spurious, bars the initiation of the Corporate Insolvency Resolution Process (CIRP) under Section 9 of the IBC. The judgment reinforces the threshold for operational creditors, ensuring frivolous claims do not trigger insolvency proceedings.