Sections 7 and 9 of the IBC
Section 7 of the IBC deals with applications made by financial creditors in respect of defaults in payment of financial debt. Whereas, Section 9 of the IBC deals with applications made by operational creditors in respect of defaults in payment of operational debts. The process of initiating CIRP is fairly similar for both operational and financial creditors when the given criteria are satisfied:
The relevant portion of Section 7 reads:
7. Initiation of corporate insolvency resolution process by financial creditor.
[…]
(5) Where the Adjudicating Authority is satisfied that –
(a) a default has occurred and the application under sub-section (2) is complete, and there is no disciplinary proceedings pending…