Where intent of the creditor is to compel payment rather than address genuine financial distress it would amount to abuse of process under the IBC. Thus, where the dispute between creditor and corporate debtor is primarily contractual in nature and involves competing claims, DRT is the appropriate forum for recovery.
Where facts do not reveal a straightforward default-debt scenario then they do not warrant initiation of CIRP. Permitting invocation of CIRP under the IBC when the dispute is pre-dominantly contractual in nature would amount to converting insolvency proceedings into a coercive mechanism for recovery of dues. DRT is the appropriate forum for recovery in such a scenario. See Dhanlaxmi Bank Limited v Mohammed Javed Sultan & Ors 2026 INSC 460.