How-to · Insolvency · IBC
How to Draft a Section 8 IBC Demand Notice (2026)
A Section 8 demand notice is the gateway to the operational creditor insolvency route. You cannot file a Section 9 petition against a defaulting company until you have served this notice and the company has failed to pay or to raise a genuine dispute within 10 days. Because the notice sets up everything that follows, a weak or wrongly drafted one can defeat even a solid debt. This guide, for suppliers, vendors and their advisers, sets out which form to use, what the notice must contain, how to serve it, and the dispute point that decides many of these cases. It is general information, not legal advice. Last verified October 2026.
- What it is: the demand notice an operational creditor must serve under Section 8 of the IBC, 2016 before a Section 9 petition.
- Form: Form 3 (demand notice) or Form 4 (notice with invoice attached) under Rule 5 of the Application to Adjudicating Authority Rules, 2016.
- The clock: the company has 10 days from receipt to pay or notify a dispute or pending suit.
- Dispute trap: a plausible pre-existing dispute usually defeats admission (Mobilox v Kirusa, 2018), so use Section 8 only on undisputed debts.
- Serve properly: at the registered office, by registered or speed post with acknowledgement, or by email to a director or KMP, and keep proof.
01The short answer
A Section 8 demand notice is served by an operational creditor on a company that has defaulted on an operational debt. It must be in Form 3, a demand notice, or Form 4, a notice with a copy of the invoice attached, under Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The company then has 10 days to either pay, or notify the existence of a dispute or a pending suit.
If the company does neither within 10 days, the creditor can file a Section 9 petition before the National Company Law Tribunal (NCLT). The single biggest risk is a pre-existing dispute: if the company can show a genuine dispute that existed before the notice, the petition is likely to be rejected.
02When you can use Section 8
Section 8 is for an operational debt, a debt for goods or services supplied, including employment and government dues, that the company has defaulted on. Before serving the notice, check three things:
- The debt is operational, not a financial loan, which uses a different route.
- There is a clear default, a due and payable amount that has not been paid.
- There is no pre-existing dispute about the debt, because that is what the company will raise to stop you.
If the debt is genuinely disputed, the insolvency route is the wrong tool. The Code is meant for undisputed defaults, not for recovering money that is honestly contested.
03Form 3 or Form 4
Rule 5 gives you two formats, and the choice depends on whether an invoice underlies the debt:
| Form | When to use it |
|---|---|
| Form 3 | A demand notice, used where there is no invoice, or alongside the records of default. |
| Form 4 | A notice with a copy of the invoice attached, where the operational debt is invoice based. |
In practice most trade debts use an invoice, so Form 4 is common, but a notice that sets out the debt properly in substance has been accepted even where the exact form was debated. Use the form that fits your debt, and make sure the particulars are complete, which matters far more than the label.
04What the notice must contain
Whichever form you use, the notice should clearly set out:
- The operational debt, the total amount in default, with a breakup.
- The date the debt fell due and the date of default.
- The particulars of the transaction: the contract, purchase orders, invoices and delivery or service records.
- Supporting documents attached, so the debt is evident on the face of the notice.
- A demand that the amount be paid within 10 days of receipt.
Be accurate on the figures and dates. Overstating the debt, or a sloppy default date, gives the company an easy opening to dispute the notice. The cleaner the arithmetic, the harder it is to resist.
05How to serve it
Service matters, because the 10-day clock runs from receipt. Rule 5 allows the notice to be delivered at the registered office of the company, sent by registered post or speed post with acknowledgement due, or sent by email to a whole time director, designated partner or key managerial personnel. A copy should also be filed with an information utility, if any.
Keep proof of service: the postal acknowledgement, courier tracking, or email delivery record. If a dispute later arises about whether and when the company received the notice, that proof is what fixes the start of the 10-day period.
06The 10-day clock and the dispute trap
Once served, the company has 10 days to either pay the debt or bring to your notice a dispute or a pending suit or arbitration about it. This is the heart of Section 8, and the most litigated point.
The Code is for undisputed debts. A plausible pre-existing dispute, raised in time, is usually enough to stop an operational creditor petition.
In Mobilox Innovations v Kirusa Software (2018), the Supreme Court held that the tribunal only has to see whether there is a plausible contention of a genuine dispute that existed before the demand notice. The dispute does not have to be proved, only to be real and not spurious. So if the debt is honestly contested, Section 8 is likely to fail, and a recovery suit is the better route.
07What happens next
If the 10 days pass with no payment and no genuine dispute, you can file a Section 9 application before the NCLT to start the corporate insolvency resolution process. The next building block is the claim and the forms that go with it. For the demand notice forms in detail, see Form 3 and Form 4 for operational creditors, and for filing your claim once a company is already in insolvency, see how to submit a claim as an operational creditor.
Remember that insolvency is a serious, public step. A strong Section 8 notice on a clearly undisputed debt is powerful leverage, but using it on a disputed debt can backfire, with costs and a rejected petition.
08Where Claw fits
Claw is an all-in-one legaltech platform for Indian advocates, law firms, and corporate legal teams, combining AI-based case search, an AI legal assistant (Legal GPT), case management, and compliance automation across all Indian courts and tribunals.
Drafting and serving the notice is for you and your advisers, which Claw does not do. Where Claw helps is in checking the company and following the matter. Claw, with ClawScore, finds and tracks a company insolvency across NCLT, NCLAT, the Insolvency and Bankruptcy Board of India and Ministry of Corporate Affairs records, with alerts and monitoring, across 9,102 courts, benches and forums, so you can see whether the company already faces insolvency or disputes before you serve a notice, and follow your own petition after. Its Legal GPT researches across 30 crore+ judgments, with Supreme Court decisions from 1950 and High Court decisions from 1990, so counsel can see how tribunals have treated the pre-existing dispute test and defective notices before. Results return in under 5 seconds, and Claw does not train its AI models on your documents. To check a company or opponent, run a case search across Indian courts by name. A clean result means nothing was found on the forums and date searched, namesakes are possible, and this is general information, not legal advice.
Related reading: Form 3 and Form 4 for operational creditors and how to submit a claim as an operational creditor.
09Sources and further reading
- India Code (Insolvency and Bankruptcy Code, 2016, Sections 8 and 9): indiacode.nic.in
- Insolvency and Bankruptcy Board of India (rules and forms): ibbi.gov.in
- Ministry of Corporate Affairs: mca.gov.in
- Claw: clawlaw.in
This guide is general information, not legal advice. The Code, rules and case law govern; take advice on your own facts before serving a notice.
10Frequently asked questions
What is a Section 8 demand notice?
It is the written demand an operational creditor must serve on a company that has defaulted on an operational debt under the Insolvency and Bankruptcy Code, 2016, before it can file an insolvency petition under Section 9. It is served in Form 3 or Form 4 under Rule 5 of the Application to Adjudicating Authority Rules, 2016, and gives the company 10 days to pay or raise a dispute.
Should I use Form 3 or Form 4?
Use Form 3 for a demand notice where there is no invoice, and Form 4 where the operational debt is invoice based and you attach a copy of the invoice. Most trade debts are invoice based, so Form 4 is common. What matters most is that the particulars of the debt, the amount, the due date and the default date are complete and accurate, not the label on the form.
What happens after I serve the notice?
The company has 10 days from receipt to either pay the debt or notify you of a dispute or a pending suit or arbitration about it. If it does neither, you can file a Section 9 application before the National Company Law Tribunal to start the corporate insolvency resolution process. If it raises a genuine pre-existing dispute, your petition is likely to be rejected.
Can a company stop my Section 8 notice by claiming a dispute?
If the dispute is genuine and existed before the notice, usually yes. In Mobilox Innovations v Kirusa Software (2018) the Supreme Court held that a plausible contention of a real pre-existing dispute is enough to resist an operational creditor petition. The dispute need not be proved, only shown to be genuine and not spurious, so the Code should be used only for undisputed defaults.
How do I serve a Section 8 demand notice?
Rule 5 lets you deliver it at the company registered office, send it by registered post or speed post with acknowledgement due, or email it to a whole time director, designated partner or key managerial personnel, with a copy filed with an information utility if any. Keep proof of service, because the 10-day period runs from the date the company receives the notice.