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The one-crore default threshold is the first filter. Where a claim falls below it the IBC is unavailable, and recovery proceeds instead through arbitration under the supply contract, an Order XXXVII summary suit, a Commercial Court claim, a Section 138 prosecution, or the MSME Samadhaan route with its compound interest at three times the RBI bank rate — often the most effective lever a vendor has against a much larger buyer.

For operational creditors the decisive issue is the pre-existing dispute. Industrial supply relationships generate quality rejections, debit notes and counterclaims as a matter of routine, and any of those raised before the demand notice will defeat a Section 9 petition, because the IBC is an insolvency mechanism rather than a recovery forum. In this sector that correspondence almost always exists, so it must be reviewed candidly before filing rather than after a rejection.

Where a petition is admitted the consequences are severe and that is the point: a moratorium halts suits and enforcement, the board is displaced in favour of a resolution professional, and the promoter may be barred under Section 29A from bidding for the company. That drives a high proportion of settlements, usually formalised as a Section 12A withdrawal with committee approval. Appeals from Ahmedabad go to the NCLAT in New Delhi.