The Insolvency and Bankruptcy Code, 2016, prescribes a stringent mechanism for the initiation of the Corporate Insolvency Resolution Process by an operational creditor. A fundamental safeguard embedded within Section 9 of the Code is the mandatory rejection of applications where a pre-existing dispute is evident.
In a recent and significant pronouncement, the Supreme Court of India, in the matter of GLS Films Industries Private Limited v. Chemical Suppliers India Private Limited (Civil Appeal No. 4019 of 2025; 2026 INSC 344), provided critical clarity on this threshold. The apex court reiterated that the adjudicating authority is solely required to ascertain the existence of a plausible dispute, explicitly cautioning appellate tribunals…