For initiation of insolvency resolution by an Operational Creditor, a demand notice u/s 8 of IBC has to be served by the unpaid Operational Debtor on the Corporate Debtor – Digvijay Kathiwada v. Haren Sanghvi & Associates and Ors. – NCLAT New Delhi
Hon’ble NCLAT held that:
(i) A plain reading of Section 8 of IBC indicates that the prerequisites necessary to trigger CIRP under Section 9 of the IBC is the existence of a debt due and its default by the corporate debtor and a corresponding delivery of demand notice of the said unpaid and undisputed debt and further that there has been no payment of the unpaid and undisputed debt within the period of 10 days of receipt of demand notice and that no real pre-existing dispute is discernible.
(ii) In view of the mandatory provision under Section 8 of IBC read with Rule 5 of IBC (Application to Adjudicating Authority) Rules, 2016 which entails that for initiation of insolvency resolution by an Operational Creditor a demand notice has to be served by the unpaid Operational Debtor on the Corporate Debtor, we feel that the contention of the Appellant deserves due consideration.