Pre-Existing Dispute under IBC: Supreme Court Reaffirms Limits of Section 9 of IBC
Pre-Existing Dispute under IBC: Supreme Court Reaffirms Limits of Section 9 GLS Films Industries Pvt. Ltd. v. Chemical Suppliers India Pvt. Ltd. (2026 INSC 344) 1. Introduction The Supreme Court, in this significant decision, has once again clarified the scope and limitations of proceedings under Section 9 of the Insolvency and Bankruptcy Code, 2016 (“ IBC ”). The ruling reiterates a crucial principle: the IBC is not a forum for adjudication of disputed claims or recovery of contested dues. The judgment reinforces that even the existence of a plausible pre-existing dispute is sufficient to reject an application filed by an operational creditor, thereby safeguarding corporate debtors from coercive insolvency proceedings. 2. Factual Matrix In the case initiation of CIRP was denied by the adjudicating authority but the appellate authority reversed the decision. Aggrieved by the said decision, the Corporate Debtor filed an Appeal before the Hon'...