Initiating CIRP as an Operational Creditor: The Section 8 Demand Notice and Section 9 Application

By S&S Co. Advocates & Solicitors · Published 24 September 2026 · Informational content, not legal advice — see our disclaimer

Step One: The Section 8 Demand Notice

An operational creditor facing default may deliver a demand notice of unpaid operational debt, on Form 3, or a copy of an invoice demanding payment, on Form 4, to the corporate debtor under Section 8 of the Insolvency and Bankruptcy Code, in accordance with Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. This is the mandatory first step — an operational creditor cannot go straight to the NCLT without first giving the debtor this opportunity to respond.

The Debtor's 10-Day Window

The corporate debtor has 10 days from delivery of the Section 8 notice either to pay the debt in full, or to bring to the operational creditor's attention the existence of a pre-existing dispute — supported by proof — or the record of a pending suit or arbitration relating to the debt. If the debtor raises a genuine pre-existing dispute within this window, that dispute stands in the way of admission of a subsequent CIRP application.

Step Two: The Section 9 Application

If no payment is received and no notice of dispute is raised within the 10-day window, the operational creditor can proceed to file an application before the NCLT on Form 5 under Section 9, together with a copy of the demand notice or invoice, an affidavit confirming that no notice of dispute has been received, and proof of non-payment — such as a bank certificate or a record from an information utility.

One threshold point to check before filing at all: the minimum default amount required to initiate CIRP is Rs. 1 crore, raised from the earlier Rs. 1 lakh threshold by a Central Government notification dated 24 March 2020. A default below this amount cannot found a Section 9 application, regardless of how clear-cut the non-payment is.

What the NCLT Actually Examines at Admission

At the admission stage, the NCLT's inquiry is deliberately narrow: it examines only whether a 'plausible' pre-existing dispute genuinely exists — one that is not spurious, hypothetical, or illusory — following the Supreme Court's guidance in Mobilox Innovations. The Tribunal does not adjudicate the actual merits of any contractual or factual dispute at this stage; that is reserved for the appropriate civil or contractual forum, with the CIRP application either proceeding or being rejected based purely on whether a genuine dispute exists, not on who would ultimately win that dispute.

It is also worth noting that sending a Section 8 demand notice does not, by itself, extend the limitation period for filing the Section 9 application — the underlying debt claim must still fall within its own limitation period, generally three years under the Limitation Act, at the time the Section 9 application is actually filed.

Frequently Asked Questions

References & Further Reading

This article references the following statutory provisions. Readers should always verify current rules, fees and timelines against the applicable statute and rules as amended, since these are revised from time to time.

1. Insolvency and Bankruptcy Code, 2016, Sections 8 and 9.
2. Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, Rule 5.
3. Mobilox Innovations Pvt. Ltd. v. Kirusa Software Pvt. Ltd., (2018) 1 SCC 353, on the 'plausible dispute' test.