Quick answer: A Section 9 IBC application must follow a Section 8 demand notice. The operational creditor serves the notice, and the company has 10 days to pay or show a genuine dispute. If it does neither, the creditor can file. If a real pre-existing dispute exists, NCLT must reject the application (Mobilox v Kirusa, 2017).
Why the demand notice is the most important document in a Section 9 case
Many operational creditors lose their insolvency petitions on paper work. The notice is defective, the dispute was ignored, or the proof of default is thin. The Section 8 notice and the debtor's reply decide most of the case.
This guide explains the process step by step. It covers what a creditor must do and how a company can respond.
Key takeaways
- Only an operational creditor files under Section 9. Lenders use Section 7.
- The minimum default for any IBC application is Rs 1 crore.
- The debtor has 10 days from receipt of the notice to pay or raise a dispute.
- A dispute that existed before the notice, and is genuine, defeats the application.
- The 2026 Amendment Act touched Sections 7, 9 and 10, so check the current text before filing.
Who is an operational creditor?
An operational creditor is a person owed an operational debt. This means a claim for goods or services supplied, including employment dues. It also covers dues under any law payable to the Central or a State Government or a local authority.
A supplier with unpaid invoices is the usual example. So is an employee owed wages, and a contractor owed running bills.
Step 1: The Section 8 demand notice
The creditor starts by delivering a demand notice of the unpaid operational debt. Alternatively, the creditor can deliver a copy of the invoice demanding payment. These are Form 3 and Form 4 under the Adjudicating Authority Rules.
How to deliver the notice
- By hand or by registered or speed post to the registered office of the company.
- By email to a whole-time director, key managerial personnel or an authorised person, as the Rules permit.
- Keep the postal receipt, tracking report and email delivery proof.
The date of delivery matters. The 10-day period runs from that date.
Step 2: The company's 10-day window
Within 10 days of receiving the notice, the corporate debtor has two options under Section 8(2). It may bring to the creditor's notice the existence of a dispute, or a record of a pending suit or arbitration filed before the notice. Or it may repay the unpaid operational debt.
| Debtor's response in 10 days | Effect on a Section 9 application | Practical point |
|---|---|---|
| Pays the full amount | No default remains, so no application | Keep proof of receipt |
| Sends a reply raising a genuine dispute | NCLT must reject if the dispute is real and pre-existing | Reply should attach earlier records |
| Shows a suit or arbitration filed before the notice | Application is liable to be rejected | Filing after the notice does not help |
| Says nothing | Creditor may file after the 10 days expire | The company can still contest at NCLT |
Step 3: Filing the Section 9 application
If the 10 days pass without payment or a notice of dispute, the creditor files in Form 5. The application should include the following.
- A copy of the demand notice or invoice.
- An affidavit that no notice of dispute has been received.
- A certificate from the financial institution maintaining the creditor's accounts, confirming no payment from the debtor.
- Particulars of the proposed interim resolution professional, with consent.
- Evidence of the debt: contracts, purchase orders, invoices, delivery proof and ledgers.
The default must be at least Rs 1 crore. Smaller claims cannot be taken up under the Code. Such claims need an ordinary recovery route.
What NCLT does after filing
Under Section 9(5), the Tribunal must either admit or reject the application within 14 days. It rejects the case where the application is incomplete and not corrected within 7 days, where payment was made, or where a notice of dispute has been received. The Tribunal admits it where the application is complete and none of these obstacles exist.
The pre-existing dispute defence: Mobilox v Kirusa
The Supreme Court in Mobilox Innovations Pvt Ltd v Kirusa Software Pvt Ltd (2017) set the test. The Tribunal does not decide who is right on the merits. It asks whether a plausible contention exists that needs further investigation.
The dispute must also be genuine. A patently feeble legal argument, or a factual claim unsupported by any evidence, does not count. And the dispute must have existed before the demand notice was received.
What usually counts as a genuine dispute
- A written quality or delivery complaint made before the notice.
- A pending suit or arbitration filed before the notice.
- Correspondence showing a disagreement about price, scope or performance.
- Records of the dispute available with an information utility.
What usually does not count
- A bare denial raised for the first time after the notice.
- A dispute invented only to delay payment.
- A suit or arbitration started after receiving the notice.
Limitation and the Section 10A window
The Limitation Act applies to IBC applications. An operational creditor generally has three years from the date of default. Acknowledgements of the debt in writing can extend this period.
Section 10A also barred applications for defaults arising on or after 25 March 2020 for one year. The Supreme Court dealt with the reach of this bar in Ramesh Kymal v Siemens Gamesa (2021). Check whether your default date falls inside that period.
What changed in 2026
The Insolvency and Bankruptcy Code (Amendment) Act, 2026 received assent on 6 April 2026. Reports note that it amends the provisions on initiation, including Sections 7, 9 and 10, and sets fixed admission timelines for NCLT. Provisions are being notified in stages.
Read the notified text and the current Rules before you file or reply. See this SCC Online summary of the 2026 Amendment Act for an overview.
Practical advice for creditors
- Build the ledger and invoice trail before issuing the notice.
- Send the notice to the registered office and by email. Keep proof.
- Diarise day 10 and file soon after. Do not wait without reason.
- Prepare electronic evidence with a certificate under Section 63 of the Bharatiya Sakshya Adhiniyam, 2023.
- Review any reply for earlier disputes before you file.
Practical advice for companies that receive a notice
- Reply within 10 days. Silence helps only the creditor.
- Attach earlier complaints, emails and any suit or arbitration filed before the notice.
- Pay the undisputed part if it is clearly due. It lowers the risk.
- Do not ignore a later Tribunal notice. Appear and file objections.
Related reading and how we assist
Read our overview of insolvency and bankruptcy proceedings and our guide to professional services in CIRP matters. Our insolvency and bankruptcy practice page lists our work for creditors and debtors.
If the claim may end in closure, see legal assistance for liquidation proceedings. To speak to an advocate, visit the contact page.
Frequently asked questions on Section 9 IBC
Who can file an application under Section 9 of the IBC?
Only an operational creditor can file under Section 9. This includes suppliers, service providers, employees and government bodies owed dues. Lenders and other financial creditors use Section 7 instead.
How long does the company have to reply to a Section 8 demand notice?
The company has 10 days from the date it receives the notice. Within that time it must either repay the debt or tell the creditor about an existing dispute, or a suit or arbitration filed earlier.
What is the minimum default for a Section 9 application?
The minimum default is Rs 1 crore. This threshold applies to applications under the Code. A smaller unpaid invoice must be recovered through a civil suit or other remedy.
What is a pre-existing dispute under the IBC?
It is a genuine dispute about the debt that existed before the demand notice was received. In Mobilox v Kirusa the Supreme Court held that a plausible contention needing investigation is enough, if not feeble or unsupported.
Can NCLT reject a Section 9 petition for a dispute raised after the notice?
Generally not. The dispute must have existed before the demand notice. A suit or arbitration filed after the notice does not meet the test under Section 8(2). The Tribunal looks at the date and the records.
Is a Section 9 application a debt recovery tool?
No. The Code aims at resolution of insolvency. A creditor who files only to force payment of a disputed sum risks rejection. Where a real dispute exists, a civil or commercial remedy is more suitable.
Did the 2026 Amendment change Section 9?
The 2026 Amendment Act received assent on 6 April 2026 and reportedly amends Sections 7, 9 and 10, with provisions notified in stages. Check the notified text and the Rules before filing or replying.
Conclusion
A Section 9 case rests on a clean notice, clear proof and an honest look at any dispute. Creditors should prepare the record first. Companies should reply on time with documents.
Law stated as on 20 October 2026. This article gives general information and is not legal advice. Please consult an advocate about your facts.
