The legislature has used the word “or” in Rule 5(2) which means that the demand notice u/s 8 of IBC could be served either at the registered office or upon the Whole Time Director – Jitendra Kumar Singh Vs. M/s Vishakarma Tool Works – NCLAT New Delhi

The demand notice, referred to Section 8(2) of the Code has to be delivered to the corporate debtor at the registered office by hand, registered post or speed post with acknowledgement due or by electronic email service to the Whole Time Director or designated partner or key managerial personnel, if any, of the corporate debtor. The legislature has used the word “or” in Rule 5(2)(a&b) which means that the demand notice could be served either at the registered office or upon the Whole Time Director. It means that service upon one of the entities is the sufficient compliance of Section 8(2) of the Code and both are not necessary. In the case of Jyoti Strips Pvt. Ltd. (2021) ibclaw.in 51 NCLAT it has been held that Section 8 of the Code read with Rule 5 of the Rules provides that service of demand notice has to be served upon the corporate debtor at its registered address. But no such issue was involved in it that in case it is not served upon a Whole Time Director then it would be an insufficient compliance.
As regards the second question, there is no quarrel with the law laid down by this Tribunal that the electronic evidence i.e. email or even whatsapp can also be looked into in order to find out the fact about an existing dispute between the parties which can be used as a shield by the corporate debtor to avoid the attack of the operational creditor with the filing of an application under Section 9 of the Code but in the present case, operational creditor has been shown in the books of accounts of the corporate debtor as sundry creditor and had admitted the debt even in the whatsapp chat but has selectively referred to the chat regarding defect in the supplied goods and raised this issue when the application under Section 9 was filed. In this regard, the findings recorded by the Tribunal does not call for any interference and are hereby upheld.

The legislature has used the word “or” in Rule 5(2) which means that the demand notice u/s 8 of IBC could be served either at the registered office or upon the Whole Time Director – Jitendra Kumar Singh Vs. M/s Vishakarma Tool Works – NCLAT New Delhi Read Post »