2020 (11) TMI 1042 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - issuance of demand notice - pre-requisite under section 8 of the Insolvency Bankruptcy Code, 2016 for filing the petition under section 9 - HELD THAT - The demand notice which is a pre-requisite under section 8 of the Insolvency Bankruptcy Code, 2016 for filing the petition under section 9, issued by the applicant on 07.10.2019 is signed and issued by an unidentified person on behalf of the applicant company without mentioning designation or full name of the person who has signed it. On perusal of the records it is found that vide Board Resolution dated 15.11.2019 one Mr. Sudeep Pramanik, Director - Human Resource has been given authority to initiate CIRP proceedings against the corporate debtor. On perusal of the records it is also found that the authority letter/Board Resolution empowering Mr. Sudeep Pramanik (page 13) to initiate action under section 9 of the I B Code, is dated 15.11.2019. While comparing with the signature appearing in the demand notice and the petition (form 5) it is found that the signatory in both the documents are different. Even assuming that the said demand notice dated 07.10.2019 was signed and issued by Mr. Sudeep Pramanik, it is evident from the records that at the time of issuing the demand notice dated 07.10.2019, Mr. Sudeep Pramanik, Director of the company had no authority to issue demand notice and the person who has signed the demand notice is somebody else who had no authority to issue such notice. The petition is bad in the eye of law and not maintainable on the very reason that the demand notice is/was issued by an unidentified person who had no authority to issue demand notice and initiate CIRP proceedings against the corporate debtor. Petition dismissed.

Summary

Issues involved:
Petition under Section 9 of The Insolvency and Bankruptcy Code, 2016 for unpaid debt.

Analysis:
1. Identification of Parties: The petitioner, a private limited company engaged in staffing services, filed a petition against the respondent, another private limited company, for unpaid invoices.

2. Agreements and Debt: The petitioner provided staffing and recruitment services to the respondent under two agreements. The respondent acknowledged the debt of over &8377;2 crores but only made a partial payment, leaving a significant amount outstanding.

3. Undertaking and Default: The respondent executed an undertaking to pay the outstanding debt but failed to fulfill the commitment, leading to the petitioner's claim for the remaining amount.

4. Demand Notice: The petitioner issued a demand notice as per the Insolvency and Bankruptcy Code, which was returned undelivered initially, but later served to the directors of the respondent both physically and via email.

5. Legal Objections: The respondent raised objections regarding the lack of documentary evidence, denial of amounts payable, and non-submission of ledger accounts and bank statements by the petitioner.

6. Judicial Findings: The Tribunal found the petition to be legally flawed as the demand notice was issued by an unauthorized person, not empowered to initiate insolvency proceedings. The mismatch in signatures and lack of proper authorization rendered the petition non-maintainable.

7. Dismissal of Petition: Consequently, the Tribunal dismissed the petition without costs, emphasizing that the dismissal was based on the issue of maintainability under the Insolvency and Bankruptcy Code, 2016. The petitioner was allowed to seek alternate legal remedies to enforce its claim against the respondent.