New Delhi, Dec. 13 -- The Supreme Court has clarified that under the Insolvency and Bankruptcy Code (IBC), a 'pre-existing dispute' capable of blocking the initiation of a Corporate Insolvency Resolution Process (CIRP) under Section 9 must be genuine, substantive, and supported by credible evidence, not a superficial or fabricated defence raised to delay proceedings.

Supreme Court Rejects 'Moonshine' Defence

A Bench of Justices Sanjay Kumar and Alok Aradhe ruled against the Corporate Debtor (CD), which tried to block CIRP by alleging quality defects in pipes and cables despite acknowledging liability and paying Rs 61 lakh after the Section 8 notice. The Court found no evidence to support the claim, calling the defence 'mere moonshine.'...