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

Sundaram Packaging Ltd supplied goods to Kaveri Foods Ltd and delivered a demand notice on 1 March. Kaveri Foods did not reply and did not pay. On 8 March, Sundaram filed a Section 9 application. Applying Section 9(1), what is the position?

The application is premature. Section 9(1) lets an operational creditor file only after ten days have expired from delivery of the demand notice or invoice without payment or a dispute notice. Filing seven days after delivery does not satisfy this condition.

  1. AThe application is premature, because the operational creditor must wait until ten days have expired from delivery of the notice before filingCorrect
  2. BThe application is valid, since the notice was delivered and no dispute was raised
  3. CThe application must be filed by a financial creditor instead
  4. DThe application is valid only if an information utility record is attached

Explanation

Section 9(1) permits filing only after the expiry of ten days from the date of delivery of the notice or invoice, and only if no payment or notice of dispute has been received. Filing on the seventh day is premature. Option 2 ignores the ten-day wait.

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