Application for initiation of corporate insolvency resolution process by operational creditor
Section 9 of the Insolvency and Bankruptcy Code, 2016 deals with application for initiation of corporate insolvency resolution process by operational creditor. After the expiry of the period of ten days from the date of delivery of the notice or invoice demanding payment under sub-section (1) of section 8, if the operational creditor does not receive payment from the corporate debtor or notice of the dispute under sub-section (2) of section 8, the operatio The Act was enacted on 28 May 2016.
(1) After the expiry of the period of ten days from the date of delivery of the notice or invoice demanding payment under sub-section (1) of section 8, if the operational creditor does not receive payment from the corporate debtor or notice of the dispute under sub-section (2) of section 8, the operational creditor may file an application before the Adjudicating Authority for initiating a corporate insolvency resolution process.
(2) The application under sub-section (1) shall be filed in such form and manner and accompanied with such fee as may be prescribed.
(3) The operational creditor shall, along with the application furnish--
(a) a copy of the invoice demanding payment or demand notice delivered by the operational creditor to the corporate debtor;
(b) an affidavit to the effect that there is no notice given by the corporate debtor relating to a dispute of the unpaid operational debt;
(c) a copy of the certificate from the financial institutions maintaining accounts of the operational creditor confirming that there is no payment of an unpaid operational debt 1 [by the corporate debtor; if available;]
2 [(d) a copy of any record with information utility confirming that there is no payment of an unpaid operational debt by the corporate debtor, if available; and
(e) any other proof confirming that there is no payment of an unpaid operational debt by the corporate debtor or such other information, as may be prescribed.]
(4) An operational creditor initiating a corporate insolvency resolution process under this section, may propose a resolution professional to act as an interim resolution professional.
(5) The Adjudicating Authority shall, within fourteen days of the receipt of the application under sub-section (2), by an order
(i) admit the application and communicate such decision to the operational creditor and the corporate debtor if,--
(a) the application made under sub-section (2) is complete;
(b) there is no 3 [payment] of the unpaid operational debt;
(c) the invoice or notice for payment to the corporate debtor has been delivered by the operational creditor;
(d) no notice of dispute has been received by the operational creditor or there is no record of dispute in the information utility; and
(e) there is no disciplinary proceeding pending against any resolution professional proposed under sub-section (4), if any;
(ii) reject the application and communicate such decision to the operational creditor and the corporate debtor, if--
(a) the application made under sub-section (2) is incomplete;
(b) there has been 3[payment] of the unpaid operational debt;
(c) the creditor has not delivered the invoice or notice for payment to the corporate debtor;
(d) notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility; or
(e) any disciplinary proceeding is pending against any proposed resolution professional:
Provided that Adjudicating Authority, shall before rejecting an application under sub-clause (a) of clause (ii) give a notice to the applicant to rectify the defect in his application within seven days of the date of receipt of such notice from the Adjudicating Authority.
(6) The corporate insolvency resolution process shall commence from the date of admission of the application under sub-section (5) of this section.
Section 9, The Insolvency and Bankruptcy Code, 2016 (Act 31 of 2016).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
This section refers to
Referred to by 11
- Income-tax Act s. 206 Special provision for minimum alternate tax and alternate minimum tax
- Income-tax Act s. 265 Return by whom to be verified
- s. 5 Definitions
- s. 10A Suspension of initiation of corporate insolvency resolution process
- s. 11A Disposal of applications under section 54C and under section 7 or section 9 or section 10
- s. 12A Withdrawal of application admitted under section 7, 9 or 10
- s. 13 Declaration of moratorium and public announcement
- s. 15 Public announcement of corporate insolvency resolution process
- s. 16 Appointment and tenure of interim resolution professional
- s. 76 Punishment for non-disclosure of dispute or payment of debt by operational creditor
- s. 239 Power to make rules
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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Mobilox Innovations Private Limited v. Kirusa Software Private Limited
Court's Decision & Legal Precedent
Judgement of Main Case order-6.pdf 2017-09-21 DATE VERIFIED (get_order_ai_analysis). CA 9405/2017. R.F. Nariman / S.K. Kaul. REPORTABLE. Isolates IBC 8/9 operational-creditor trigger: s.8(2)(a) ‘and’ is read as ‘or’; ‘dispute’ in s.5(6) is inclusive; the AA must reject a s.9 application if a plausible contention requiring investigation exists and is not spurious, hypothetical or illusory — the court need not be satisfied the defence will succeed. NDA-breach correspondence was a genuine dispute. Map insolvency-bankruptcy-code-2016 8 and 9 cited. Do not pad IBC 7 (already filled by Innoventive/Swiss Ribbons/Vidarbha).
On this section: An IBC 9 operational-creditor application must be rejected if a genuine pre-existing dispute exists; the AA looks only for a plausible contention, not whether the defence will succeed (Mobilox).
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Macquarie Bank Limited v. Shilpi Cable Technologies Ltd.
Court's Decision & Legal Precedent
Judgement of Main Case order-4.pdf 2017-12-15. CA 15135/2017 (with CA 15481/2017 and 15447/2017). R.F. Nariman J. REPORTABLE. Digitally signed 2017.12.15 17:00:32 IST. DATE-CHECK false positive (supply-agreement/invoice dates 2015 in the facts); body is the named reportable. Isolates IBC 8 (a lawyer authorised by the operational creditor may issue the s.8 demand notice) and IBC 9(3)(c) (the financial-institution certificate is directory, not a mandatory threshold, especially for a foreign operational creditor). Distinctive from Mobilox’s existence-of-dispute isolate. Map insolvency-bankruptcy-code-2016 8 and 9 cited. Do not pad IBC 7.
On this section: IBC 9(3)(c) financial-institution certificate is directory; a foreign operational creditor is not non-suited for want of an Indian scheduled-bank certificate (Macquarie Bank). Distinctive from Mobilox’s dispute test.
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Vidarbha Industries Power Limited vs Axis Bank Limited
Court's Decision & Legal Precedent
Section 7(5)(a) of the Insolvency and Bankruptcy Code 2016 confers discretionary power on the Adjudicating Authority (NCLT) to admit or reject an application for Corporate Insolvency Resolution Process filed by a financial creditor, even when default is established and the application is complete. The NCLT must apply its mind to relevant factors including the feasibility of initiating CIRP against the corporate debtor, the impact of pending regulatory appeals and awards, and the overall financial health and viability of the corporate debtor under its existing management. The existence of a financial debt and default in payment thereof only gives the financial creditor the right to apply for initiation of CIRP; it does not mandate automatic admission. The NCLT may exercise its discretion to keep the admission of the application in abeyance or reject it if the corporate debtor demonstrates that a substantial award or decree in its favor is pending, which if realized would exceed the debt claimed by the financial creditor.
On this section: Application by operational creditor for CIRP - Section 9(5) uses 'shall' making it mandatory, contrasted with discretionary 'may' in Section 7(5)
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Chandra Prakash Jain RP vs Mr. Rajendra Sharma & Ors.
Court's Decision & Legal Precedent
A consolidated interlocutory application in insolvency proceedings may be bifurcated into separate applications addressing distinct sections of the Insolvency and Bankruptcy Code when such bifurcation promotes procedural efficiency and does not prejudice the rights of any party. The tribunal has the discretion to segregate applications to streamline complex insolvency proceedings involving multiple respondents and diverse legal issues.
On this section: The order is issued under Section 9 IBC, which deals with the initiation of corporate insolvency resolution process
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Judgments citing this section
These may be obiter dicta or a precedent, for you to study. These are the judgments where this section is quoted.
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… An endeavor for mediation was made but was not successful and, thus, the next date was scheduled before the Magistrate for 15.01.2018. In the meantime, a development, which took place, was that in 2017 M/s Neeraj Paper Agencies Limited, styling itself as 'Operational Creditor', filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as ' IBC' ) read with Rule 6 of Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, (hereinafter referred to as ' IB Rules, 2016 ') with the request to initiate Corporate Insolvency Resolution Process against the Accused …
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… An endeavor for mediation was made but was not successful and, thus, the next date was scheduled before the Magistrate for 15.01.2018. In the meantime, a development, which took place, was that in 2017 M/s Neeraj Paper Agencies Limited, styling itself as 'Operational Creditor', filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as ' IBC' ) read with Rule 6 of Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, (hereinafter referred to as ' IB Rules, 2016 ') with the request to initiate Corporate Insolvency Resolution Process against the Accused …
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… An endeavor for mediation was made but was not successful and, thus, the next date was scheduled before the Magistrate for 15.01.2018. In the meantime, a development, which took place, was that in 2017 M/s Neeraj Paper Agencies Limited, styling itself as 'Operational Creditor', filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as ' IBC' ) read with Rule 6 of Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, (hereinafter referred to as ' IB Rules, 2016 ') with the request to initiate Corporate Insolvency Resolution Process against the Accused …
Made under this section, and citing it
5 instruments state that it was made under this provision — the power to make it comes from here, so a change to any of them changes what this section requires in practice. Newest first.
- Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2022Regulation 2022
- The Insolvency and Bankruptcy (Application to Adjudicating Authority) (Amendment) Rules, 2020Rule 2020
- The Insolvency and Bankruptcy (Application to Adjudicating Authority) Amendment Rules, 2019Rule 2019
- The Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (upto 19-03-2019)Rule 2019
- Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016Rule 2016
Another 3 instruments name this provision in its title or its text without being made under it.
Questions about Section 9
What have the courts held on Section 9 of the Insolvency and Bankruptcy Code?
Mobilox Innovations Private Limited v. Kirusa Software Private Limited (21 Sep 2017) is the leading judgment on this section among those set out below: An IBC 9 operational-creditor application must be rejected if a genuine pre-existing dispute exists; the AA looks only for a plausible contention, not whether the defence will succeed (Mobilox). Another 3 judgments on this section are set out below, 3 of them from the Supreme Court. They run from 2017 to 2022.
How do I find court cases under Section 9 of the Insolvency and Bankruptcy Code?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Insolvency and Bankruptcy Code 9, section 9 Insolvency and Bankruptcy Code, section 9 of the Insolvency and Bankruptcy Code. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 4 reported judgments on this section are set out on this page, beginning with Mobilox Innovations Private Limited v. Kirusa Software Private Limited (21 Sep 2017).
What should I read with Section 9 of the Insolvency and Bankruptcy Code, and has it changed?
Its own text turns on section 8 (Insolvency resolution by operational creditor), so none of them can safely be read on its own. 11 other provisions in this corpus refer back to it. The rules and notifications made under it are where it actually bites, and there are 5: most recently Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Second Amendment) Regulations, 2022 (2022), then The Insolvency and Bankruptcy (Application to Adjudicating Authority) (Amendment) Rules, 2020 (2020), and 3 more.
When was Section 9 of the Insolvency and Bankruptcy Code enacted?
Section 9 of the Insolvency and Bankruptcy Code, commonly called operational creditor, and cited as Insolvency and Bankruptcy Code 9, was enacted on 28 May 2016 as Act 31 of 2016. It is in force as at the date shown on this page.
Other sections of this Act
- 240. Power to make regulations2349 words
- 5. Definitions2326 words
- 3. Definitions1381 words
- 29A. Person not eligible to be resolution applicant1152 words
- 239. Power to make rules963 words
- 196. Powers and functions of Board942 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 15 Oct 2026. This page is not a substitute for legal advice.