IBC Demand Notice Received? You Have 10 Days. Here’s How to Stop Insolvency Proceedings

You open your email or receive a courier at your office. It looks like another legal notice.

It is not.

It is an IBC demand notice under Section 8 of the Insolvency and Bankruptcy Code, 2016. And if you are a director, promoter or business owner, you should understand one thing immediately:

You have very little time to decide what to do next.

Section 8 gives the corporate debtor 10 days from receipt of the demand notice to respond in the manner recognised by the Code.

Those ten days can make a substantial difference.

If the debt is genuinely disputed, the dispute may prevent the creditor from commencing Corporate Insolvency Resolution Process (CIRP) under Section 9.

If the company does nothing, however, the operational creditor may proceed to the NCLT after the statutory period, subject to the requirements of the Code.

Once CIRP is admitted, the consequences are far more serious. A moratorium comes into operation, management of the company changes substantially, the powers of the board are suspended, and an Interim Resolution Professional takes control of the insolvency process.

That is why I tell business owners who receive an IBC demand notice:

• Do not put it aside.
• Do not send it casually to your accounts department.
• Do not wait for the tenth day.
• Get the notice examined immediately.

In my experience of more than 25 years at the Bar, the first response is often more important than the argument made months later before the NCLT.

What Exactly Is an IBC Demand Notice?

An IBC demand notice is the formal demand contemplated by Section 8 of the Insolvency and Bankruptcy Code.

It is generally issued by an operational creditor claiming that an operational debt has become due and that the corporate debtor has committed a default.

The notice may be issued in Form 3, or in Form 4 where the invoice demanding payment is attached, under the applicable insolvency rules.

The purpose is not merely to demand money.

The notice starts a statutory process.

The creditor is effectively saying:

You have defaulted on an operational debt. Pay it, or tell us within the statutory period why the debt is genuinely disputed or otherwise dealt with under Section 8.

For a company that receives such a notice, this is therefore the moment to stop treating the matter as an ordinary accounts dispute.

The 10-Day Rule: Why You Should Act Immediately

Section 8(2) gives the corporate debtor ten days from receipt of the demand notice to respond.

The company may bring to the creditor’s notice:

• the existence of a dispute;
• the pendency of a suit or arbitration concerning the dispute, where the statutory requirements are satisfied; or
• proof that the unpaid operational debt has already been paid.

This is why the date of receipt is so important.

Do not assume that the date printed on the notice is automatically the date from which your ten days are calculated.

Preserve the email, courier envelope, delivery record, acknowledgment and any other evidence showing when the company actually received the notice.

A simple mistake about dates can become a serious procedural problem later.

First Question: Is the Debt Actually Disputed?

Before worrying about how aggressively to reply, ask a much more basic question:

Do we genuinely dispute this debt?

There is a major difference between:

Situation	Nature of the Position
“We owe the money, but we need another three months to pay.”	Inability or delay in payment.
“We do not owe this amount because the goods supplied were defective, the invoices were disputed before the demand notice, and the parties have been trying to reconcile the accounts for months.”	May raise a genuine pre-existing dispute under the IBC.

The second situation may raise a genuine pre-existing dispute under the IBC.

The first may simply be a case of inability or delay in payment.

That distinction can determine whether a Section 9 insolvency application is maintainable.

What the Supreme Court Says About a Pre-Existing Dispute

The leading authority remains Mobilox Innovations Pvt. Ltd. v. Kirusa Software Pvt. Ltd., (2018) 1 SCC 353.

The Supreme Court made it clear that the NCLT is not supposed to conduct a full trial when considering a Section 9 application.

The question is whether there is a plausible dispute requiring further investigation.

The dispute must be genuine. It cannot be a sham, a hypothetical objection or a defence manufactured merely to defeat the insolvency proceedings.

But there is an equally important point for business owners:

You do not have to prove at the Section 8 stage that you will ultimately win the commercial dispute.

You have to demonstrate that the dispute genuinely existed and requires adjudication.

That distinction is at the heart of the Supreme Court’s recent decision in GLS Films Industries Pvt. Ltd. v. Chemical Suppliers India Pvt. Ltd., 2026 INSC 344.

GLS Films: The Supreme Court’s Important April 2026 Decision

On 9 April 2026, the Supreme Court decided GLS Films Industries Pvt. Ltd. v. Chemical Suppliers India Pvt. Ltd., Civil Appeal No. 4019 of 2025, 2026 INSC 344.

For a company that has just received an IBC demand notice, this judgment is particularly useful.

The dispute arose from chemical supplies.

The creditor claimed approximately ₹2.92 crore, including interest.

But the corporate debtor’s case did not begin with the Section 8 demand notice.

There was earlier correspondence between the parties concerning defective supplies, debit and credit adjustments and reconciliation of accounts.

There was also a complaint made before the demand notice.

That chronology mattered.

The NCLT rejected the Section 9 application because it found a plausible pre-existing dispute.

The NCLAT subsequently took a different view and directed admission of the application.

The matter eventually reached the Supreme Court.

The Supreme Court restored the NCLT’s order.

And the practical lesson for a company receiving an IBC demand notice is extremely important:

• The NCLT is not supposed to conduct a mini-trial.
• If the corporate debtor can demonstrate a genuine dispute that existed before the Section 8 notice, the NCLT should not decide the entire commercial dispute merely to determine whether insolvency proceedings should begin.
• The question is whether the dispute is real and requires investigation.

It is not:

“Which side is definitely going to win?”

That distinction can save a company from being dragged into CIRP over a genuinely disputed commercial claim.

Why the Documents Before the Notice Matter So Much

There is a practical lesson from GLS Films that every director should understand.

Suppose you receive an IBC demand notice today alleging that ₹2 crore is payable for goods supplied last year.

You immediately send a reply saying:

“The goods were defective and we deny liability.”

That statement alone may not carry much weight.

But suppose your company had already:

• complained about the defective goods six months earlier;
• sent photographs or inspection reports;
• rejected some consignments;
• issued debit notes;
• asked for a credit note;
• disputed invoices;
• sought reconciliation of accounts; and
• exchanged several emails with the supplier about the problem.

Now the situation is completely different.

You are not creating a dispute because an IBC demand notice has arrived.

You are documenting a dispute that already existed.

That is precisely the distinction the Supreme Court’s jurisprudence protects.

Also Read: File Legal Notice in India: Complete Guide to Drafting, Procedure, Cost & Legal Rights

Do Not Manufacture a Dispute After Receiving the Notice

This protection has an equally important limitation.

A company cannot manufacture a dispute simply because an insolvency notice has arrived.

Imagine that for two years:

• every invoice was accepted;
• no quality complaint was made;
• no debit note was issued;
• no reconciliation was requested;
• no arbitration was commenced;
• the company’s ledger acknowledged the amount; and
• payments were regularly made.

Then, immediately after receiving the IBC demand notice, the company sends a letter saying:

“The goods were defective and therefore we dispute the entire amount.”

That is a very different case from GLS Films.

The Supreme Court has repeatedly made clear that a dispute must be genuine.

Saraswati Wire: The Other Side of the Story

This is why Saraswati Wire and Cable Industries v. Mohammad Moinuddin Khan, 2025 INSC 1410 is also important.

In that case, the corporate debtor’s own records and conduct were inconsistent with the defence it later sought to rely upon.

The Supreme Court found the alleged dispute to be a moonshine defence in the circumstances of that case and restored the admission of the Section 9 application.

The lesson is straightforward:

Your own documents can become your strongest evidence—or your biggest problem.

Your ledger, emails, acknowledgments, payments and correspondence will all be examined.

So do not assume that a cleverly worded reply can overcome years of contradictory business records.

One Important Correction: What You Do After the Notice Matters

I would caution directors against a common mistake.

• Do not casually write:

“We admit the amount but need six months to pay.”

• Do not send an email saying:

“We accept your outstanding balance; please give us some time.”

• Do not make a part-payment without first understanding how it will affect the dispute.

Such conduct can become relevant when the creditor argues that there was never a genuine dispute.

This does not mean that every payment after a Section 8 notice automatically destroys a defence. The Supreme Court’s decisions are more nuanced than that.

The real issue is the entire factual picture.

Also Read: Foreign Company vs Indian Company: Where Should You Sue? | India Litigation Guide

What Should Your Section 8 Reply Actually Say?

This is where professional advice becomes extremely valuable.

A Section 8 reply should not simply say:

“We deny the allegations.”

It should explain why the debt is disputed.

For example:

“Invoice No. 123 dated 10 January 2026 is disputed because the goods supplied pursuant to Purchase Order No. 456 were rejected following the quality inspection dated 15 January 2026. This was communicated to you by our email dated 16 January 2026.”

That is far stronger.

It identifies:

• the invoice;
• the contract or purchase order;
• the specific problem;
• the date;
• the earlier communication; and
• the documentary evidence.

The reply should then annex the relevant documents.

What Documents Should You Collect Immediately?

If an IBC demand notice lands on your desk, collect the entire commercial file.

At a minimum:

Contractual Documents

• Agreement
• Purchase order
• Work order
• Terms and conditions
• Amendments

Financial Records

• Invoices
• Ledger
• Debit notes
• Credit notes
• Bank statements
• Payment records
• Reconciliation statements

Performance Records

• Delivery challans
• Inspection reports
• Quality reports
• Rejection reports
• Emails concerning defective goods
• Correspondence concerning delay or short supply

Legal Records

• Previous legal notices
• Arbitration notices
• Civil suits
• Settlement correspondence
• Earlier complaints
• Notices exchanged before the IBC demand notice

The question is not simply:

“Can we dispute the invoice?”

The better question is:

“Can we prove that the dispute already existed before the IBC demand notice?”

What If Only Part of the Amount Is Disputed?

This is another area where companies need to be careful.

Suppose the creditor claims ₹1.50 crore.

The company accepts that ₹40 lakh is payable but disputes ₹1.10 crore because of defective supplies.

The legal position cannot be reduced to the simple statement that “there is a dispute, so insolvency is impossible.”

The statutory threshold and the amount of actual default have to be examined carefully.

The present notified threshold for initiating CIRP is ₹1 crore.

Therefore, the nature and amount of the undisputed default become critically important.

This should be analysed from the invoices, ledger, payments, adjustments and the precise nature of the dispute—not merely from the figure printed in the demand notice.

What About the ₹1 Crore Threshold?

This is an important point for business owners.

Section 4 of the IBC originally referred to a much lower threshold.

The Central Government subsequently notified ₹1 crore as the minimum amount of default for initiation of CIRP under the relevant notification dated 24 March 2020.

Therefore, if the default is below ₹1 crore, a Section 9 application cannot ordinarily be used to initiate CIRP on that default.

But do not make the mistake of looking only at the creditor’s demand.

If the creditor claims ₹1.25 crore but ₹40 lakh is genuinely disputed, the calculation requires legal examination.

The question is not simply:

“Does the notice say more than ₹1 crore?”

What If the Creditor’s Figures Keep Changing?

Look carefully at the history of the claim.

This was one of the interesting features in GLS Films.

The creditor had earlier demanded approximately ₹4.60 crore and subsequently claimed approximately ₹2.92 crore in the Section 8 notice.

The creditor explained the difference by reference to adjustments.

That explanation did not automatically defeat the claim.

But the changing figures, together with the other correspondence and ledger discrepancies, reinforced the conclusion that there was an unresolved dispute requiring investigation.

So when an IBC demand notice arrives, compare:

Stage	What to Check
Earlier demand	Amount originally demanded
Invoices	Amounts billed and dates
Ledger	Entries, balances and adjustments
Debit notes	Additional amounts claimed
Credit notes	Reductions or adjustments
Payments	Amounts already paid
Final Section 8 demand	Amount ultimately claimed

If the numbers do not reconcile, ask why.

Also Read: Foreign Sanctions vs. Indian Law: Can EU or US Sanctions Override an Indian Contract?

What If the Demand Includes Interest?

Interest requires particular attention.

Check:

• whether the contract permits interest;
• the agreed rate;
• when interest became payable;
• whether the invoices contain an interest clause; and
• whether the interest itself is disputed.

Do not assume that adding a large amount of contractual interest automatically converts a disputed commercial claim into an undisputed operational debt.

The underlying contractual documents and the nature of the dispute must be examined.

Can an Advocate Issue the IBC Demand Notice?

Yes.

The Supreme Court settled this issue in Macquarie Bank Ltd. v. Shilpi Cable Technologies Ltd., (2018) 2 SCC 674.

A properly authorised advocate can issue a Section 8 demand notice on behalf of the operational creditor.

Therefore, if your objection is simply:

“This notice was sent by a lawyer, not personally by the creditor.”

that is generally not a defence.

The important questions are whether the statutory requirements have otherwise been satisfied and whether there is a genuine dispute.

What About Improper Service?

Service should still be examined.

In Visa Coke Ltd. v. Mesco Kalinga Steel Ltd., 2025 INSC 597, the Supreme Court considered service of a Section 8 notice upon key managerial personnel at the registered office.

The Court held, in the circumstances of that case, that such delivery constituted service.

The broader lesson is not that service requirements can be ignored.

It is this:

Do not rely on a purely technical service objection when the company actually received the demand and understood what was being demanded.

At the same time, if the notice genuinely was never served in accordance with the statutory requirements, that issue should be examined immediately.

What If There Is Already an Arbitration?

This can be extremely important.

In K. Kishan v. Vijay Nirman Co. (P) Ltd., (2018) 17 SCC 662, the Supreme Court recognised the significance of an existing dispute concerning an arbitral claim.

The IBC should not become a shortcut for bypassing an existing genuine dispute merely because one party has labelled its claim an “operational debt.”

If arbitration is already pending, or a legally significant dispute concerning an arbitral award already exists, the documents should be placed before the insolvency lawyer immediately.

Can You Settle the Matter?

Yes—and sometimes settlement is commercially wiser than litigation.

There is no prize for taking every commercial dispute to the Supreme Court.

If the debt is substantially genuine and the creditor is willing to negotiate, settlement may protect the company’s business relationship and avoid the consequences of CIRP.

Possible arrangements may include:

• full payment;
• negotiated payment;
• instalments;
• settlement against withdrawal;
• adjustment of credit notes;
• agreed reconciliation; or
• a written no-dues arrangement.

But every settlement should be documented carefully.

Do not rely upon a telephone promise that:

“We will withdraw the case after you pay.”

Get the settlement terms in writing.

What If the Section 9 Application Has Already Been Filed?

Do not assume that the opportunity has disappeared.

The NCLT still has to consider whether the statutory requirements for admission are satisfied.

Your earlier Section 8 reply, the documents supporting the pre-existing dispute, limitation issues, the amount of default and other statutory requirements may remain important.

But the situation becomes more difficult once litigation has already begun.

That is why I would strongly advise a company to act when the IBC demand notice arrives, rather than waiting for the NCLT petition.

What Happens If CIRP Is Admitted?

This is the point every director should understand.

Admission of a Section 9 application can have consequences far beyond an ordinary money-recovery suit.

Among other things, the insolvency process brings a statutory moratorium and the management structure of the company changes substantially. The powers of the board of directors are suspended and an Interim Resolution Professional takes charge of the CIRP framework.

A public announcement is also made.

The commercial impact can be significant.

• Customers may ask questions.
• Banks may react.
• Suppliers may become cautious.
• Employees may become concerned.

That is why preventing an unnecessary admission can be commercially more important than winning a dispute months later.

The Most Important Development After GLS Films

There is one later Supreme Court decision that should not be ignored.

In Srinivasa Reddy Velagala v. Sravanthi Infratech Pvt. Ltd., 2026 INSC 835, decided on 12 August 2026, the Supreme Court considered several important issues concerning Section 9 proceedings.

The judgment is particularly relevant on:

• limitation;
• operational debt;
• uncrystallised damages;
• pre-existing dispute; and
• prolonged silence in response to demands.

The decision shows why GLS Films should not be interpreted as saying that any allegation of a dispute will stop CIRP.

A dispute must still be genuine.

The Court also considered the evidentiary significance of prolonged and unexplained silence in the particular circumstances before it.

The practical lesson is simple:

Your conduct over time matters.

If the company genuinely disputes a debt, that dispute should ordinarily be visible in the company’s records and correspondence.

A Demand Notice Is Not the Same as a Finding of Insolvency

This distinction is worth remembering.

Receiving an IBC demand notice does not mean that the NCLT has declared your company insolvent.

It means that an operational creditor has invoked the statutory mechanism preceding a possible Section 9 application.

There is still an opportunity to:

• pay;
• dispute;
• demonstrate an existing dispute;
• establish that the amount claimed is incorrect;
• raise limitation;
• reconcile accounts;
• negotiate settlement; or
• otherwise contest the proposed insolvency proceedings in accordance with law.

But that opportunity has a deadline.

Ten days.

My Practical Advice to a Director Who Has Just Received an IBC Demand Notice

If this has happened to your company today, I would suggest doing five things immediately.

1. Preserve the Notice

Do not forward it casually and then lose the original email or delivery record.

Record the exact date and manner of receipt.

2. Freeze the File

Collect every document relating to the transaction.

Do not allow relevant emails, messages or accounting records to disappear.

3. Find the History

Ask one question:

“When did we first tell the creditor that something was wrong?”

That date may become crucial.

4. Do Not Make an Admission Casually

A hurried email from a director can later become evidence.

Get legal advice before acknowledging liability, promising payment or making a part-payment where the debt is genuinely disputed.

5. Decide Quickly

There are usually four broad commercial choices:

• Pay.
• Settle.
• Dispute and defend.
• Or negotiate a structured resolution.

Waiting is not a strategy.

Your 10-Day Action Plan

Time	What You Should Do
Day 1	Record receipt of the IBC demand notice and preserve proof.
Day 1–2	Collect the contract, invoices, ledger, bank records and correspondence.
Day 2–3	Identify whether the debt is admitted, partly disputed or genuinely disputed.
Day 3–4	Find evidence showing when the dispute first arose.
Day 4–6	Obtain legal advice and decide between payment, settlement and defence.
Day 6–8	Prepare a detailed Section 8(2) response with supporting documents.
Day 8–9	Send the response through appropriate channels and preserve proof.
Day 10	Verify that the response and delivery records are safely preserved.

Do not wait until Day 10 to start.

Final Word: Ten Days Can Make a Difference

An IBC demand notice is serious, but it is not the same thing as an insolvency order.

The Supreme Court’s decision in GLS Films is a useful reminder that a company facing a Section 8 notice is entitled to rely upon a genuine, plausible and pre-existing dispute.

But the protection is not available to a company that simply invents a dispute after receiving the notice.

The difference is usually found in the documents.

• Was the complaint made earlier?
• Was the invoice disputed?
• Were the goods rejected?
• Was a debit note issued?
• Was reconciliation requested?
• Was arbitration commenced?
• Did the company’s own ledger acknowledge the amount?
• What did the company write to the creditor six months before the demand notice?

These questions can matter far more than the wording of a hurried reply prepared after the notice arrives.

After more than 25 years of practice, my advice to a director receiving an IBC demand notice is therefore straightforward:

• Do not panic. But do not wait.
• The law gives you an opportunity to respond.
• Use those ten days intelligently.
• If the debt is genuinely disputed, establish that dispute with documents.
• If the debt is payable, explore settlement before the matter reaches admission.
• If the creditor’s claim is legally or factually defective, challenge it properly and at the earliest stage.

The first ten days are not the time to hope the problem will disappear. They are the time to decide how you are going to stop it.

Need Urgent Advice on an IBC Demand Notice?

If your company has received a Section 8 IBC demand notice, the immediate priority is to determine whether the claim is genuinely payable, whether a pre-existing dispute can be established, whether the ₹1 crore threshold is satisfied, whether limitation or other statutory issues arise, and whether settlement is commercially preferable to litigation.

Received an IBC Demand Notice? Don’t Wait for the 10 Days to Run Out.

An IBC Demand Notice under Section 8 is not an ordinary recovery notice. If you are a company director, promoter, business owner or corporate debtor, the next few days can be critical.

A properly prepared response may help you challenge a disputed operational debt, establish a genuine pre-existing dispute, negotiate a settlement, or prevent an avoidable Section 9 insolvency proceeding.

The Supreme Court’s decision in GLS Films Industries v. Chemical Suppliers India (2026 INSC 344) reinforces the importance of a genuine, pre-existing dispute supported by contemporaneous documents.

Don’t Wait Until a Section 9 Petition Is Filed

If you have received an IBC demand notice, get the notice reviewed immediately. The sooner your legal position is assessed, the more options you may have.

Adv. Tarun Choudhury

Supreme Court Advocate | 25+ Years of Legal Experience

📞 For Urgent IBC Legal Consultation
Call: 9650499965
WhatsApp: 8851978611
Email: admin@legalserviceindia.com

Get your IBC demand notice, Section 8 reply, pre-existing dispute and insolvency risk professionally assessed before the 10-day window expires.

Don’t ignore the notice. Don’t make a casual admission. Don’t wait for the NCLT petition.

Get legal advice while you still have time to act.

This article is intended for general legal information and does not constitute legal advice in any particular case.

Frequently Asked Questions About IBC Demand Notices

1. What Should I Do After Receiving an IBC Demand Notice Under Section 8?

After receiving an IBC demand notice under Section 8 of the Insolvency and Bankruptcy Code, 2016, a corporate debtor should immediately verify the amount claimed, collect the relevant contracts, invoices, ledgers and correspondence, and determine whether there is a genuine dispute.

Section 8 generally gives the corporate debtor 10 days from receipt of the notice to bring the existence of a dispute to the creditor’s notice or provide proof of payment. A timely and properly documented response can be critical in resisting a subsequent Section 9 insolvency application.

2. Can a Pre-Existing Dispute Stop Insolvency Proceedings Under Section 9 of the IBC?

Yes. A genuine pre-existing dispute concerning an operational debt can prevent initiation of CIRP under Section 9 of the IBC.

The Supreme Court in Mobilox Innovations Pvt. Ltd. v. Kirusa Software Pvt. Ltd. held that the dispute must be genuine and more than a spurious, hypothetical or illusory defence.

The 2026 decision in GLS Films Industries Pvt. Ltd. v. Chemical Suppliers India Pvt. Ltd. reaffirmed that the NCLT should not conduct a mini-trial to determine the ultimate merits of a genuine commercial dispute at the admission stage.

3. How Many Days Do I Have to Reply to an IBC Demand Notice?

A corporate debtor generally has 10 days from receipt of an IBC demand notice under Section 8 to respond by bringing the existence of a dispute to the operational creditor’s notice or by furnishing proof of payment, as applicable.

The date of receipt is therefore extremely important. A company should preserve the email, courier record, acknowledgment or other evidence showing when the notice was actually received.

4. Can an IBC Demand Notice Be Challenged if the Amount Claimed Is Disputed or Incorrect?

Yes, depending on the facts.

A company may have grounds to contest an IBC demand notice where the underlying operational debt is genuinely disputed, the accounts require reconciliation, the goods or services were defective or deficient, payments or credit notes have not been properly adjusted, or other substantive issues existed before the demand notice.

However, merely denying the debt after receiving the notice is not enough. The dispute should be genuine, pre-existing and supported by contemporaneous documents.

5. Can I Settle an IBC Demand Notice Before Section 9 Insolvency Proceedings Are Admitted?

Yes. A company receiving an IBC demand notice can explore payment or a negotiated settlement before the Section 9 application is admitted.

Depending on the stage of proceedings, different withdrawal and settlement mechanisms may apply.

From a commercial perspective, early settlement can sometimes avoid the substantially greater consequences of CIRP, moratorium and appointment of an Interim Resolution Professional.

Any settlement should be properly documented and should clearly record the terms of withdrawal, payment and discharge of the claim.

Key Takeaways: IBC Demand Notice

• An IBC demand notice under Section 8 gives a corporate debtor only 10 days from receipt to respond. This short statutory window should be treated as an urgent legal deadline, not as an ordinary recovery notice.
• A genuine pre-existing dispute can prevent insolvency proceedings under Section 9 of the IBC. The dispute must have existed before the Section 8 demand notice and must be supported by credible contemporaneous evidence.
• The Supreme Court’s decision in GLS Films Industries Pvt. Ltd. v. Chemical Suppliers India Pvt. Ltd., 2026 INSC 344, reinforces the Mobilox principle. The NCLT should determine whether a plausible and genuine dispute exists; it should not conduct a full trial to decide which party will ultimately win.
• Documents created before the IBC demand notice can be crucial. Earlier emails, quality complaints, rejected supplies, debit notes, credit notes, reconciliation requests, payment records and legal correspondence may help establish a pre-existing dispute.
• A dispute cannot simply be manufactured after receiving an IBC demand notice. A vague denial or an unsupported allegation of defective goods may not be sufficient to defeat a Section 9 insolvency application.
• The company’s own conduct matters. Ledger acknowledgments, admissions, payments and prolonged unexplained silence can weaken a defence that a genuine dispute existed.
• The current CIRP threshold is ₹1 crore. However, the amount mentioned in an IBC demand notice should not be accepted automatically; the actual default, disputed amounts, payments, adjustments and applicable interest must be examined.
• An IBC demand notice should be checked for more than the amount claimed. The company should immediately examine the contract, invoices, ledger, limitation, interest calculation, service, previous correspondence and the history of the commercial dispute.
• Settlement remains an important option. If the debt is substantially payable, early negotiation or a properly documented settlement may avoid the considerably more serious consequences of admission into CIRP.
• The safest response is not to ignore an IBC demand notice. A company should obtain urgent legal advice, preserve its records and decide quickly whether to pay, settle, or contest the claim on legally sustainable grounds.

Summary

Received an IBC demand notice? Act within 10 days. Under Section 8 of the IBC, a corporate debtor can respond by bringing a genuine pre-existing dispute to the operational creditor’s notice or providing proof of payment.

The Supreme Court’s GLS Films Industries v. Chemical Suppliers India (2026) decision confirms that the NCLT should not conduct a mini-trial where a genuine, plausible pre-existing dispute exists.

However, a dispute created only after receiving the notice may not protect the company.

Early legal review, documentary evidence and a carefully prepared Section 8 reply can be critical to resisting avoidable Section 9 insolvency proceedings and CIRP.

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