The ₹1 Crore Minimum Threshold for Section 9 IBC Applications: Which Date Counts?

An operational creditor seeking to initiate corporate insolvency resolution process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) must show a default meeting the statutory minimum. Since 24 March 2020, the minimum default threshold under Section 9 IBC is ₹1 crore. Questions have arisen where the debt fell due, or the Section 8 demand notice was issued, when the threshold was ₹1 lakh, but the Section 9 application was filed after 24 March 2020. Tribunals have also considered whether part payments made after filing can reduce the default below the ₹1 crore threshold. This article explains the Section 9 IBC threshold, the date that determines the applicable limit, post-filing payments, and the treatment of interest and disputed amounts.

The Statutory Threshold Under the IBC

Section 4 of the IBC provides that Part II, which governs corporate insolvency, applies where the minimum default is ₹1 lakh, and empowers the Central Government to specify a higher minimum not exceeding ₹1 crore. By notification S.O. 1205(E) dated 24 March 2020, the Ministry of Corporate Affairs specified ₹1 crore as the minimum threshold for corporate insolvency applications under the IBC, including applications under Section 9.

“Default” under Section 3(12) means non-payment of debt, in whole or in part, when it has become due and payable and is not paid by the debtor.

Applications Pending on 24 March 2020

In Madhusudan Tantia v. Amit Choraria (NCLAT, New Delhi, 13 October 2020), the National Company Law Appellate Tribunal held that the notification is prospective and does not apply to applications that were already pending before the Adjudicating Authority, awaiting admission, when it was issued. An application filed before 24 March 2020 is therefore assessed against the ₹1 lakh minimum that applied when it was filed.

Applications Filed on or After 24 March 2020

The converse question is whether an operational creditor who served a demand notice under Section 8 before 24 March 2020, but filed the Section 9 application afterwards, can rely on the old Section 9 IBC threshold.

In Ralco Extrusion Pvt. Ltd. v. Centech Engineers Pvt. Ltd. (NCLT, Mumbai Bench, order reported as dated 8 May 2024), the Tribunal answered no. It held that the relevant date for determining the minimum threshold is the date on which the application is filed, not the date of the Section 8 demand notice. Accordingly, the ₹1 crore threshold applies to applications under Sections 7, 9 and 10 filed on or after 24 March 2020, even if the default occurred earlier.

Taken together, Madhusudan Tantia and Ralco Extrusion treat the date of filing as the decisive date for determining the applicable threshold. Ralco Extrusion is a decision of one NCLT Bench consistent with the NCLAT’s approach; it is not a Supreme Court ruling, and parties should check for any later appellate treatment in a particular case.

Part Payment after Filing

A related question is whether a corporate debtor can defeat an application by paying enough after it is filed to bring the outstanding default below ₹1 crore. In Omshree Agro Tech Pvt. Ltd. v. Kasturi Farm Pvt. Ltd. (NCLT, Mumbai Bench, 17 March 2026), as reported, the Tribunal held that the threshold must be satisfied on the date of filing, and that part payment made after filing does not by itself render the application non-maintainable. Payment may, however, be relevant to other questions, such as whether the default has been cured before admission or whether the creditor has concealed a payment.

Interest, Disputed Amounts and the Threshold

Whether amounts other than principal can be counted depends on the nature of the claim:

• Contractually stipulated interest. In Prashat Agarwal v. Vikash Parasrampuria (NCLAT, 18 July 2022), interest on delayed payment stipulated in the invoices was held to form part of the debt and could be aggregated with principal to reach the threshold.
• Unagreed or statutory interest. Tribunals have generally declined to count interest that was not agreed, or that depends on establishing a statutory entitlement such as interest under the Micro, Small and Medium Enterprises Development Act, 2006, in summary Section 9 proceedings.
• Disputed amounts. Under Section 9(5)(ii)(d) and the Supreme Court’s decision in Mobilox Innovations Pvt. Ltd. v. Kirusa Software Pvt. Ltd., (2018) 1 SCC 353, a plausible pre-existing dispute is a ground for rejection. An amount that is genuinely disputed does not help establish an undisputed default.

Changes from 26 May 2026 Affecting Section 9 Applications

The Insolvency and Bankruptcy Code (Amendment) Act, 2026 did not change the ₹1 crore threshold, but it altered the surrounding procedure:

• Information utility filing. Amended Section 215(3) requires an operational creditor to submit financial information to an information utility before filing a Section 9 application.
• Time for decision. A new proviso to Section 9(5) requires the Adjudicating Authority to record reasons if it does not decide the application within fourteen days.
• Penalty for concealment. New Section 67C allows a penalty of not less than ₹1 lakh and up to ₹2 crore where an operational creditor conceals, in a Section 9 application, that the corporate debtor had notified a dispute or had made full and final payment.
• Frivolous proceedings. New Section 64A allows a penalty of not less than ₹1 lakh and up to ₹2 crore for frivolous or vexatious proceedings.

Illustrative Scenarios

The following hypothetical examples show how the principles apply. They are illustrative only.

Key Takeaways

• The minimum threshold under Section 9 IBC has been ₹1 crore since 24 March 2020.
• The date of filing the Section 9 application, rather than the date of the demand notice or default, determines which threshold applies.
• A part payment made after filing does not automatically make the Section 9 application non-maintainable, although it may affect other issues.
• Agreed and undisputed interest may be included in calculating the default, while disputed or purely statutory amounts generally may not be counted.

FAQ

What is the minimum threshold under Section 9 IBC?

Since 24 March 2020, the minimum threshold under Section 9 IBC is ₹1 crore for filing a corporate insolvency resolution process application.

When did the ₹1 crore IBC threshold come into effect?

The ₹1 crore threshold came into effect on 24 March 2020 through an MCA notification under Section 4 of the IBC.

Which date determines the IBC threshold?

The date of filing the Section 9 application determines the applicable threshold, rather than the date of default or the Section 8 demand notice.

Does part payment after filing affect the IBC threshold?

A part payment made after filing does not by itself make the Section 9 application non-maintainable if the ₹1 crore threshold was satisfied on the filing date.

Can interest be included in the ₹1 crore threshold?

Contractually agreed and undisputed interest may be included with the principal when calculating the default for the ₹1 crore threshold.

Does a disputed debt count towards the Section 9 threshold?

A genuine pre-existing dispute regarding the operational debt can lead to rejection of a Section 9 application under the Mobilox test.

Legal Information Disclaimer

This article provides general information about Indian law as it stood on 16 September 2026. It is not legal advice, and reading it does not create an advocate–client relationship. Statutes, rules and judicial interpretations change, and their application depends on the facts of each matter. Readers should consult the current official text of the laws and judgments cited and should not act on this information without advice specific to their circumstances. This article is published for legal awareness and education and is not intended to advertise or solicit professional work.

Sources / Authorities

1. Insolvency and Bankruptcy Code, 2016 — Sections 3(12), 4, 8, 9, 64A, 67C, 215 (as amended) — IBBI – Legal Framework
2. Ministry of Corporate Affairs, Notification S.O. 1205(E) dated 24 March 2020
3. Insolvency and Bankruptcy Code (Amendment) Act, 2026 (No. 6 of 2026) — Gazette text (IBBI); Notification S.O. 2625(E) dated 22 May 2026 — IBBI
4. Madhusudan Tantia v. Amit Choraria, NCLAT, New Delhi, 13 October 2020 — summary, IBC Laws
5. Ralco Extrusion Pvt. Ltd. v. Centech Engineers Pvt. Ltd., NCLT, Mumbai Bench, 8 May 2024 — summary, IBC Laws
6. Omshree Agro Tech Pvt. Ltd. v. Kasturi Farm Pvt. Ltd., NCLT, Mumbai Bench, 17 March 2026 — summary, IBC Laws
7. Prashat Agarwal v. Vikash Parasrampuria, NCLAT, New Delhi, 18 July 2022 — summary, IBC Laws
8. Mobilox Innovations Pvt. Ltd. v. Kirusa Software Pvt. Ltd., (2018) 1 SCC 353, Supreme Court of India, 21 September 2017