Under the Insolvency and Bankruptcy Code, 2016 (Code), an operational creditor can initiate a corporate insolvency resolution process (CIRP) of the corporate debtor by filing an application before the relevant National Company Law Tribunal (NCLT/ Adjudicating Authority) upon occurrence of a default in payment of its operational debt.
However, the operational creditor must first send a demand notice or invoice to the corporate debtor, demanding the payment of the defaulted debt. In case the corporate debtor issues a notice of dispute to the operational creditor, the Adjudicating Authority is required to reject the application of the operational creditor.
Since the Code has been notified, one of key interpretational question that has arisen …
Read the full article at: http://www.livelaw.in/finally-interpretation-dispute-nclat-kirusa-v-mobilox/