XYZ Ltd supplied goods on credit to ABC Ltd, which failed to pay ₹25 lakh despite reminders. The supplier now wishes to initiate the corporate insolvency resolution process against ABC Ltd. Under the Insolvency and Bankruptcy Code 2016, which precondition must be satisfied first?

Under the Insolvency and Bankruptcy Code 2016, an operational creditor seeks to initiate the corporate insolvency resolution process by filing an application under Section 9. Before doing so, Section 8 requires the creditor to deliver a demand notice of unpaid operational debt to the corporate debtor, requiring the debtor to make payment of the amount or to furnish a reply disputing the debt within ten days of the receipt of the notice. If the debtor fails to pay or to raise a plausible dispute within that ten day period, the creditor may file the application before the Adjudicating Authority under Section 9. No civil court decree, consent of a financial creditor, ninety day waiting period or winding-up petition is required. The ten day demand notice is therefore the statutory precondition for an operational creditor's application.