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Home / Legal Notices / IBC Demand Notice (Section 8)
Last updated: 2 October 2026
Suppliers and service providers owed ₹1 crore or more by a company can serve a demand notice under the Insolvency and Bankruptcy Code before applying to the NCLT. Expertvuw’s team checks eligibility and records, and coordinates the Form 3/4 notice and next steps through independent advocates.
Under section 8 of the Insolvency and Bankruptcy Code, 2016, an operational creditor — a supplier of goods or services, or an employee or government for certain dues — must first deliver a demand notice (Form 3) or a copy of invoice demanding payment (Form 4) to the corporate debtor when a default occurs. The corporate debtor then has ten days to pay or to bring to the creditor’s notice the existence of a dispute, such as a pending suit or arbitration, recorded before the notice.
If there is no payment and no pre-existing dispute, the operational creditor can apply to the National Company Law Tribunal under section 9 to start the corporate insolvency resolution process. The minimum default for initiating insolvency is ₹1 crore. The IBC (Amendment) Act, 2026, parts of which came into force in May 2026, tightened admission timelines and added consequences for frivolous or vexatious applications.
IBC is a collective resolution process, not a simple recovery tool, so the decision to use it should consider the debtor’s situation and your commercial goals.
Basis: Insolvency and Bankruptcy Code, 2016 (sections 4, 8, 9) as amended by the IBC (Amendment) Act, 2026; IBBI (Application to Adjudicating Authority) Rules, 2016 (Forms 3 and 4); MCA notification on ₹1 crore threshold (2020). Last updated: 27 September 2026.
Minimum default of ₹1 crore to initiate insolvency.
Form 3 demand notice or Form 4 invoice demand.
Debtor must pay or show a pre-existing dispute.
A genuine dispute before the notice blocks a section 9 application.
Tighter admission timelines and penalties for frivolous applications.
IBC resolves insolvency; it is not a routine recovery tool.
Many operational creditor applications are rejected.
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IBC notices connect with these services.
Company law insolvency support.
Other recovery routes.
Replying to a demand notice.
Tribunal proceedings.
Check threshold and debt type.
Look for any pre-existing dispute.
Advocate serves Form 3 or 4.
10 days for payment or dispute.
Choose section 9 or other routes.
Counsel files before the NCLT.
Respond to what the debtor does.
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Share your query and our team will reply during business hours.
A notice by an operational creditor demanding payment of a defaulted debt before applying for insolvency under the IBC.
A default of ₹1 crore or more.
Ten days to pay or show a pre-existing dispute.
Yes, a genuine dispute existing before the notice can block a section 9 application.
The IBC (Amendment) Act, 2026 tightened admission timelines and added penalties for frivolous applications.
ACS – Director, Expertvuw Management Pvt Ltd
Documents are drafted by Expertvuw’s team for your review. Legal notices are issued, and representation before courts, tribunals and consumer commissions is made, by independent advocates. Expertvuw is a corporate services company, not a law firm.