Demand Notice-Communication/Service/Delivery

Failure to serve Demand Notice under Section 8 of IBC is not a mere technical or curable defect but a mandatory precondition for filing Application under Section 9 of the Code for initiating CIRP against Corporate Debtor – Quess Corp Ltd. Vs. Wardwiz (India) Solutions Pvt. Ltd. – NCLT Mumbai Bench

Hon’ble NCLT Mumbai held that:

(i) Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 mandates that the statutory Demand Notice must be served on the Corporate Debtor at its registered office by hand or RPAD or Speed Post. In this case, it is seen that the Demand Notice was not sent to the registered address of the Corporate Debtor as per the Master Data of the Corporate Debtor available on the MCA website.
(ii) In this connection, it would not be out of place to refer to the judgment of Hon’ble NCLAT in the matter of Shailendra Sharma Vs. Ercon Composites (2021) ibclaw.in 14 NCLAT wherein it has been held that the service of Demand Notice to the corporate debtor as per Section 8 is a mandatory requirement.
(iii) Thus, it is settled that failure to serve the Demand Notice under Section 8 of the Code is not a mere technical or curable defect but a mandatory precondition for filing Application under Section 9 of the Code for initiating CIRP against the Corporate Debtor.

Failure to serve Demand Notice under Section 8 of IBC is not a mere technical or curable defect but a mandatory precondition for filing Application under Section 9 of the Code for initiating CIRP against Corporate Debtor – Quess Corp Ltd. Vs. Wardwiz (India) Solutions Pvt. Ltd. – NCLT Mumbai Bench Read Post »

The service of the Demand Notice u/s 8 of the Code is a sine qua non of an application u/s 9 of the IBC – Shri Karvir Nivasini Mahalaxmi Ispat Pvt. Ltd. Vs. Vistacore Infraprojects Pvt. Ltd. – NCLT Mumbai Bench

The Adjudicating Authority observed from the records that the demand notice sent by the Operational Creditors is undated. Also, the Demand Notice is required to be delivered to the Corporate Debtor at the registered office either by hand or through registered post with acknowledgement or electronic mail service. However, it is seen from the record, that the Operational Creditor has not furnished any evidence to prove that the Demand Notice was duly served to the Corporate Debtor at its registered address of the Corporate Debtor. The Operational Creditor has not attached any proof of delivery receipt nor any acknowledgement of the demand notice.

The service of the Demand Notice u/s 8 of the Code is a sine qua non of an application u/s 9 of the IBC – Shri Karvir Nivasini Mahalaxmi Ispat Pvt. Ltd. Vs. Vistacore Infraprojects Pvt. Ltd. – NCLT Mumbai Bench Read Post »

Whether service of Demand Notice u/s 8 of IBC to official email id of Corporate Debtor available on MCA portal which is not the email address of Whole-Time Director/Key Managerial Personnel is valid or not? – DHL Supply Chain India Pvt. Ltd. Vs. Eicher Motors Ltd. – NCLT New Delhi Bench Court-II

In this case, the Respondent stated that the Demand Notice is not served upon the Corporate Debtor at the registered office by hand, registered post, or speed post with acknowledgment due or by electronic mail service to a whole-time director or designated partner or key managerial personnel. It is served via official email which is not the email address of a key managerial personnel.
The Adjudicating Authority held that no illegality or deficiency in the service of the Demand Notice, which has been duly served through the E-mail addressed to the Corporate Debtor with “Attention to its Managing Director”, who is a “Key Managerial Personnel” of the Corporate Debtor. Hence, we would like to proceed ahead in examining the application on its merits.

Whether service of Demand Notice u/s 8 of IBC to official email id of Corporate Debtor available on MCA portal which is not the email address of Whole-Time Director/Key Managerial Personnel is valid or not? – DHL Supply Chain India Pvt. Ltd. Vs. Eicher Motors Ltd. – NCLT New Delhi Bench Court-II Read Post »

The authenticity of the postal stamps on the postage receipts are not the subject matter which can be decided by the Adjudicating Authority or this Tribunal in view of summary jurisdiction having been conferred on them by the IBC – B.C.P.L. International Ltd. Vs. Kalimata Ispat Industries Pvt. Ltd. – NCLAT New Delhi

NCLAT held that the authenticity of the postal stamps on the postage receipts are not the subject matter which can be decided by the Adjudicating Authority or this Tribunal in view of summary jurisdiction having been conferred on them by the IBC. Enquiry into such allegations and counter-allegations would entail detailed investigation and the legislative intent of the IBC does not clothe the Adjudicating Authority with such powers of investigation. We are thus of the considered view that the Adjudicating Authority has not committed any error by restraining itself from entering into any sort of roving enquiry on this issue.

The authenticity of the postal stamps on the postage receipts are not the subject matter which can be decided by the Adjudicating Authority or this Tribunal in view of summary jurisdiction having been conferred on them by the IBC – B.C.P.L. International Ltd. Vs. Kalimata Ispat Industries Pvt. Ltd. – NCLAT New Delhi Read Post »

Whether IRP(became IRP after admission of the CIRP) who had served the notice under Section 8 of the Code is a related party in terms of Section 5(24)(h) of the Code? – Nileshbhai Shantilal Patel Vs. Westin Resins and Ploymers Pvt. Ltd. & Anr. – NCLAT New Delhi

NCLAT held that a close scrutiny of the Section 5(24)(h) would show, firstly, that it relates to the Corporate Debtor and not to the Operational Creditor and secondly the Appellant was to lead evidence that the Director, Partner or Manager was accustomed to act on the directions or instructions of the said IP. Therefore, in our considered opinion, Section 5(24)(h) of the Code is not at all applicable to the facts and circumstances of the present case and thus the arguments raised in this regard, is hereby rejected. Since, we are dictating the order in the court, Sr. counsel for the Appellant has then referred to Section 5(24-A)(h) of the Code to submit that the related party in relation to an individual should also be looked into in regard to Section 5(24-A)(h). We have also referred to that provision but the same is not applicable because the dispute is between two corporate entities and not in respect of the individuals.

Whether IRP(became IRP after admission of the CIRP) who had served the notice under Section 8 of the Code is a related party in terms of Section 5(24)(h) of the Code? – Nileshbhai Shantilal Patel Vs. Westin Resins and Ploymers Pvt. Ltd. & Anr. – NCLAT New Delhi Read Post »

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