If you supplied goods or services to a company and it has stopped paying, the Insolvency and Bankruptcy Code gives you a route that many businesses find more effective than a civil suit: a petition under Section 9 before the NCLT. If the unpaid amount is Rs 1 crore or more and there is no genuine dispute about it, the company risks being taken into insolvency, with its management suspended.
Section 9 is not a debt collection tool in name, but in practice the threat of it often brings payment. It works only if the paperwork is right. The demand notice must be served properly, the company must not have raised a real dispute before the notice, and the petition must reach the correct bench within time. This page explains how it works and where suppliers most often go wrong.
हिंदी में सारांश
अगर आपने किसी कंपनी को माल या सेवाà¤à¤‚ दी हैं और कंपनी ₹1 करोड़ या उससे ज़à¥à¤¯à¤¾à¤¦à¤¾ का à¤à¥à¤—तान नहीं कर रही, तो आप IBC की धारा 9 के तहत NCLT में दिवाला याचिका दायर कर सकते हैं। पहले धारा 8 के तहत डिमांड नोटिस à¤à¥‡à¤œà¤¨à¤¾ ज़रूरी है। कंपनी के पास 10 दिन होते हैं — या तो à¤à¥à¤—तान करे या नोटिस से पहले से चल रहे किसी असली विवाद का सबूत दे। अगर पहले से कोई विवाद था, तो याचिका खारिज हो सकती है।
Is this your situation?
- You supplied goods, materials or services to a company and invoices are unpaid
- The unpaid amount (with interest, if the contract provides for it) is Rs 1 crore or more
- The buyer never complained about quality or quantity before the dues piled up
- Your last unpaid invoice is less than three years old, or the buyer has acknowledged the dues since
- You are a contractor whose running bills have been certified but not paid
- You are an employee or workman with unpaid salary or dues from a company
- You have sent reminders and the buyer keeps promising to pay "next month"
Who can file under Section 9
An operational creditor is anyone owed an "operational debt": a claim for goods or services supplied, for employment dues, or for certain government dues. The test is the nature of the transaction, not the size of your business.
Suppliers and manufacturers
Raw material suppliers, component makers and traders with unpaid invoices are the most common Section 9 applicants.
Service providers
IT companies, consultants, logistics firms, advertising agencies and facility managers can all file for unpaid service invoices.
Contractors
Civil, electrical and fabrication contractors with unpaid running or final bills. Certified bills are particularly useful as proof.
Employees and workmen
Unpaid salary and dues are operational debts. Employees can file individually or together, though the Rs 1 crore threshold applies to the default.
Landlords (sometimes)
Unpaid rent for commercial premises has been treated differently in different cases. Whether a lease rent claim is an operational debt depends on the facts, and we advise on it case by case.
Assignees of trade debts
A party to whom trade receivables have been assigned can file, subject to proper documentation.
How the Section 9 route works
Demand notice under Section 8
Before filing, you must deliver a demand notice to the company in Form 3, or a copy of the unpaid invoice demanding payment in Form 4, at its registered office. The notice sets out the debt and asks for payment. See our page on the Section 8 demand notice.
Ten days for the company to respond
Within 10 days of receiving the notice, the company must either pay or tell you about an existing dispute, with a record of any suit or arbitration pending on it. A dispute that is raised for the first time in reply to the notice, with no trail before it, usually does not help the company.
File the petition in Form 5
If the 10 days pass without payment or a genuine dispute, you can file the petition in Form 5 before the NCLT bench covering the company's registered office. You attach the invoices, the notice and proof of delivery, and an affidavit that no notice of dispute was received. You may, but need not, propose an interim resolution professional.
Hearing on admission
The company is heard. The main questions are: is there an operational debt, is it due and unpaid, does it cross Rs 1 crore, was the notice properly delivered, and did the company raise a real dispute before the notice? The NCLT is expected to decide within 14 days of filing and must record reasons for any delay, but contested hearings often take longer.
Admission or rejection
If admitted, insolvency begins: a moratorium applies, an interim resolution professional takes over and the company's financial creditors decide its future. If rejected because of a pre-existing dispute, you are free to pursue a civil suit or arbitration instead.
Settlement along the way
Many companies settle once the petition is filed or soon after. Before admission, the petition can be withdrawn after payment. After admission, withdrawal is restricted. See settle and withdraw.
The "pre-existing dispute" test
More Section 9 petitions fail on this point than on any other. In Mobilox Innovations v Kirusa Software (2017), the Supreme Court held that the NCLT must reject a Section 9 petition if there is a plausible dispute that existed before the demand notice was received. The dispute need not be proved, but it must be real, not a "patently feeble legal argument" or an assertion unsupported by evidence.
In practice, the NCLT looks at the correspondence before the notice. Things that help the supplier:
- delivery challans and goods receipt notes signed by the buyer;
- emails or letters where the buyer acknowledged the dues or asked for time;
- part payments made against specific invoices without objection;
- ledger confirmations or balance confirmations sent by the buyer;
- certified running bills or measurement sheets for contractors.
Things that help the buyer:
- written complaints about quality or short supply sent before the notice;
- debit notes or rejection notes issued at the time;
- a pending suit or arbitration about the same invoices;
- a counter-claim raised in writing before the notice.
If your file has early complaints from the buyer, Section 9 may not be the right route, and a summary suit for unpaid invoices in the Commercial Court may work better. We check this before you spend money on the petition.
Time and typical cost
Our fee is agreed in writing before we start and does not depend on the result.
| Stage | Usual time | What it involves |
|---|---|---|
| Review of invoices and correspondence | 2 to 5 days | Our fee for the opinion |
| Demand notice (Form 3 or 4) | Prepared in about a week; 10 days for the reply | Drafting and service at the registered office |
| Petition in Form 5 | 1 to 2 weeks after the 10 days expire | NCLT filing fee as per the tribunal's rules (the fee for operational creditors is modest); our fee |
| Hearings up to admission | Due in 14 days by law; often 2 to 6 months in practice | Hearings, rejoinder, written submissions |
| After admission | CIRP of 180 days, extendable by 90 | Operational creditors are not usually on the creditors' committee |
Documents you will need
Proof of the debt
- Purchase orders, work orders or agreement
- Invoices and delivery challans
- Goods receipt notes, signed acknowledgements
- Ledger statement or balance confirmation
Proof of default
- Reminders sent and replies received
- Record of part payments and dates
- Bank statement showing no payment against the invoices
The demand notice
- Copy of the Section 8 notice or invoice in Form 4
- Proof of delivery at the registered office (courier, post, email to registered email)
- Any reply received from the company
For filing
- Board resolution or authorisation (if you are a company)
- MCA master data of the debtor company
- Consent of the proposed interim resolution professional (optional)
- Affidavit that no notice of dispute was received
Where the petition is filed
The petition goes to the NCLT bench for the state where the debtor company's registered office is located. Your own location and the place of supply do not matter. A buyer registered in Noida means NCLT Allahabad; a buyer registered in Gurugram means NCLT Chandigarh; a buyer registered in Delhi means NCLT New Delhi. Check the registered office on the MCA portal before sending the demand notice, because the notice too must go there.
How we help suppliers
- File check before notice: we read the emails and ledgers first. If the buyer complained early, we will tell you before you spend money on a petition that may fail.
- Notice drafted for the hearing: the demand notice is drafted with the Form 5 petition in mind, so the two match on amounts, invoices and dates.
- Correct service: we serve at the registered office by more than one mode and keep proof of each, because "notice not received" is a common defence.
- Realistic advice on interest: interest counts only if the contract or invoices provide for it, and we calculate it on that basis.
- Alternative routes ready: if the petition is not the right fit, we can move quickly to a commercial suit or arbitration.
A logistics firm and a late "quality complaint"
Here's a made-up example. A transport company in Ghaziabad carried goods for a Delhi manufacturer for two years. By early 2026 unpaid freight bills totalled Rs 1.3 crore. The manufacturer's accounts team had confirmed the balance by email in December 2025 and asked for three months to pay.
We sent a demand notice under Section 8. Eight days later the manufacturer replied that some consignments were delayed and it had suffered losses. There was no complaint on record before the notice. We filed a Section 9 petition before NCLT New Delhi, relying on the December email as an acknowledgment. Before the second hearing, the manufacturer paid the principal in two instalments and the petition was withdrawn.
Mistakes suppliers make with Section 9
- Adding invoices the buyer disputed: one disputed invoice can colour the whole claim. Leave out invoices with a clear complaint trail and claim the clean ones, if they still cross Rs 1 crore.
- Counting GST paid on disputed supplies: the amount claimed should match what the buyer actually owes under the contract, including tax, and nothing more.
- Forgetting MSMED Act remedies: a registered micro or small supplier may have a faster route through the MSME Facilitation Council, with statutory interest. Compare it before choosing insolvency.
- Not proving delivery: without signed challans, e-way bills or goods receipt notes, the buyer can simply deny receipt. Collect them before you send the notice.
- Letting limitation run: a three-year-old invoice without an acknowledgment is time-barred, however clear the debt. Check the oldest invoice in your claim.
Key terms in plain words
| Term | What it means |
|---|---|
| Operational creditor | A person owed money for goods, services, employment or certain government dues |
| Operational debt | A claim arising from supply of goods or services, employment, or certain statutory dues |
| Demand notice | The notice in Form 3 or Form 4 that must precede a Section 9 petition |
| Notice of dispute | The company's reply pointing to a genuine dispute that existed before the notice |
| Form 5 | The prescribed form for an operational creditor's insolvency petition |
| Admission | The NCLT's order starting the insolvency process |
Frequently Asked Questions
What is the minimum amount for a Section 9 petition?
The default must be Rs 1 crore or more. Interest counts towards the amount only if your contract or invoices provide for it.
Is the demand notice compulsory?
Yes. A Section 9 petition cannot be filed without first delivering a demand notice in Form 3 or an invoice in Form 4 and waiting 10 days.
What if the company replies saying it disputes the bill?
The NCLT will look at whether the dispute existed before the notice. If there are earlier written complaints or a pending case, the petition will likely be rejected. A dispute invented after the notice usually does not stop admission.
Can I claim interest?
Only where the agreement, purchase order or invoices provide for interest. Statutory interest under the MSMED Act may also be relevant for registered micro and small enterprises.
Do I need to propose a resolution professional?
No. It is optional for operational creditors. If you do not propose one, the NCLT obtains a name from the IBBI.
Will I get paid if the company is admitted into insolvency?
Operational creditors are paid under the resolution plan, and often receive a fraction of their claim. That is why many suppliers aim for a settlement before admission.
What is the time limit?
Generally three years from the date the payment became due, extended by written acknowledgments made within that period.
How are your fees decided?
By the amount involved, the likely opposition and the stage, agreed in writing at the start. They do not depend on the result.
Unpaid Invoices? Let's Check Your File
Send us your invoices, ledger and the buyer's emails. We will tell you whether Section 9 is the right route or whether a suit will serve you better.
This page gives general information about the law as it stood when it was last reviewed. It is not legal advice on your case and does not promise any result. IBC rules and NCLT procedures change often, so outcomes depend on your own documents, dates and facts.
Need help with Supplier's Insolvency Petition for Unpaid Bills?
Send us the notice, the petition or the order. We will tell you where you stand, which bench hears it and the date the next step is due, in plain words.
