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

Under Section 8(2)(a), which of the following can the corporate debtor bring to the notice of the operational creditor within the response period regarding a dispute?

The debtor may bring to notice the existence of a dispute, or a record of a suit or arbitration proceedings in relation to the dispute filed before it received the notice or invoice. A later-filed suit or a plea of lacking funds does not qualify under this provision.

  1. AOnly the existence of a dispute, never a record of litigation
  2. BThe existence of a dispute, or a record of pendency of a suit or arbitration proceedings filed before receipt of the notice or invoice in relation to the disputeCorrect
  3. COnly a suit filed after receipt of the demand notice
  4. DA statement that the debtor lacks funds to pay the debt

Explanation

Section 8(2)(a), as amended in 2018, lets the debtor point to the existence of a dispute, or a record of a suit or arbitration pending that was filed before receipt of the notice or invoice in relation to that dispute. A suit filed after receipt is not covered, and inability to pay is not a dispute.

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