Section 9: Application for initiation of corporate insolvency resolution process by operational creditor

The Insolvency and Bankruptcy Code, 2016

PART II Insolvency Resolution and Liquidation for Corporate Persons

CHAPTER II Corporate Insolvency Resolution Process(CIRP)

Section 9: Application for initiation of corporate insolvency resolution process by operational creditor:

9. (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 any 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 ⁴[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.

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Amendments:

1.  Substituted by the Insolvency and Bankruptcy Code (Second Amendment) Act, 2018, for the word “by the corporate debtor; and” in clause (c) of section 9(3) (w.e.f. 06.06.2018).

2. Substituted by the Insolvency and Bankruptcy Code (Second Amendment) Act, 2018, clause (d) of section 9(3) for the clause (d) “(d) such other information as may be specified.”(w.e.f. 06.06.2018).

3. Substituted by the Insolvency and Bankruptcy Code (Second Amendment) Act, 2018, for the word “repayment”, clause (i)(b) of section 9(5) (w.e.f. 06.06.2018).

4. Substituted by the Insolvency and Bankruptcy Code (Second Amendment) Act, 2018, for the word “repayment”, clause (ii)(b) of section 9(5) (w.e.f. 06.06.2018).