(1) An operational creditor may, on the occurrence of a default, deliver a demand notice of unpaid operational debtor copy of an invoice demanding payment of the amount involved in the default to the corporate debtor in such form and manner as may be prescribed.
(2) The corporate debtor shall, within a period of ten days of the receipt of the demand notice or copy of the invoice bring to the notice of the operational creditor—
(a) existence of a dispute, if any, or record of the pendency of a suit or arbitration proceedings filed before the receipt of such notice;
(b) the payment of unpaid operational debt by sending an attested copy of the record of electronic transfer or an attested copy of the record showing that the cheque was encashed.
Legal Commentary & Landmark Judgments: Section 8
Section 8 mandates the serving of a formal 10-day statutory demand notice or copy of an unpaid invoice as an indispensable condition precedent before an operational creditor can initiate insolvency proceedings against a corporate debtor.
This statutory framework establishes clear operational guidelines, balancing legal compliance with procedural safeguards.
Section 8 operates as a statutory circuit-breaker, ensuring that operational creditors cannot weaponize insolvency as a coercive summary debt-collection tactic. The mandatory 10-day window provides the debtor an opportunity to exhibit legitimate contractual contestations or settle undisputed invoices.