Skip to content

CS Professional · Corporate Restructuring, Valuation and Insolvency · Application for Corporate Insolvency Resolution Process

Himalaya Textiles Ltd filed a Section 9 application. Before filing, Deccan Retail Ltd, the corporate debtor, had sent Himalaya a written notice stating that the goods were defective and that the invoice amount was disputed. Himalaya's affidavit under Section 9(3)(b) nonetheless states that no dispute notice was received. What is the consequence under Section 9(5)?

The Adjudicating Authority may reject the application. Section 9(5)(ii)(d) provides that where notice of dispute has been received by the operational creditor, the application is to be rejected, and a contrary affidavit cannot override the dispute notice actually received.

  1. AThe application is admitted because the operational creditor's affidavit prevails
  2. BThe Adjudicating Authority may reject the application, as notice of dispute has been received by the operational creditorCorrect
  3. CThe application is converted into a Section 7 application
  4. DThe application is admitted if the debt exceeds the threshold limit

Explanation

Section 9(5)(ii)(d) provides for rejection where notice of dispute has been received by the operational creditor. The affidavit is contradicted by the record, so the dispute stands and admission is unavailable.

Did you get it right without looking?

One question tells you little. A timed set on Application for Corporate Insolvency Resolution Process shows your real accuracy, how long you take and where you lose marks.

Practise Application for Corporate Insolvency Resolution ProcessFree diagnostic mock

More Application for Corporate Insolvency Resolution Process questions