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2019 (3) TMI 881 - SC - Insolvency and BankruptcyCorporate insolvency proceedings - NCLT admitted the insolvency petition stating that there was no record to show that there was existence of a pre-existing dispute - NCLAT set aside the judgment of the NCLT solely on the ground that the said notice was issued by a Law Firm and not by the Operational Creditor itself - HELD THAT - We have, by our judgment in Macquarie Bank Limited Ltd. vs. Shilpi Cable Technologies Limited 2017 (12) TMI 850 - SUPREME COURT OF INDIA held that this view of the law is incorrect. This being the case, we set aside the judgment of the NCLAT and remand the matter for hearing on the merits.
Issues involved:
Operational Creditor's demand notice under Section 8 of the Insolvency & Bankruptcy Code, 2016; Admittance of insolvency petition by NCLT based on respondent's letter; NCLAT's decision to set aside NCLT's judgment due to notice issued by a Law Firm; Interpretation of law based on Macquarie Bank Limited Ltd. vs. Shilpi Cable Technologies Limited, (2018) 2 SCC 674; Setting aside NCLAT's judgment and remanding the matter for hearing on merits. Analysis: The case involved an Operational Creditor who had issued a demand notice under Section 8 of the Insolvency & Bankruptcy Code, 2016. The National Company Law Tribunal (NCLT) in Hyderabad admitted the insolvency petition after considering the demand notice and finding no record of a pre-existing dispute based on a letter from the respondent. The matter was then appealed to the National Company Law Appellate Tribunal (NCLAT) in New Delhi, which set aside NCLT's judgment. The NCLAT's decision was primarily based on the fact that the notice was issued by a Law Firm and not directly by the Operational Creditor. The Supreme Court referred to its judgment in Macquarie Bank Limited Ltd. vs. Shilpi Cable Technologies Limited, (2018) 2 SCC 674, where it was held that the view that a notice issued by a Law Firm on behalf of an Operational Creditor is incorrect. Based on this interpretation of the law, the Supreme Court set aside the NCLAT's judgment and remanded the matter for a hearing on the merits. Ultimately, the appeal was allowed in favor of the Operational Creditor, emphasizing the importance of correctly interpreting the legal provisions regarding the issuance of demand notices in insolvency cases.
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