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TMI Blog2017 (6) TMI 655X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent company till the time the process of winding up has been initiated. The aforesaid aspect has been taken care of by the Transfer Rules which provide that all those cases where notices have been served were to be retained by the Hon'ble High Court and in rest of the cases where notices could not be served were to be transferred to this Tribunal. Moreover, the nature of the remedy in sum and substance continues to be available in the form of Insolvency and Bankruptcy which may eventually results into liquidation of the respondent company. Thus the result is similar to the one which would be achieved in case of winding up. It needs to be further added that right becomes a vested right only when its acquired and is enjoyed by a litigant. Merely by filing a petition no right is acquired leave aside the enjoyment of such a right. Therefore, we are unable to persuade ourselves to accept first contention raised by the petitioner. In the absence of demand notice under Section 8 (1) of the Code, the petitioner could not have approached this Tribunal for initiation of insolvency resolution process against the respondent company. In the present case, there are many other defects poi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia') was incorporated on 13.10.2005 under the Companies Act, 1956 as a private company with limited liability by shares. It was duly registered with the Registrar of Companies, NCT Delhi and Haryana (Annexure P/1). Its registered office is situated at Shop No.G- 8, Plot No. A-6786, Left portion, Ground Floor, Smrat Bhawan, Community Centre, Ranjit Nagar, Delhi 11000. The authorized share capital of the Bycell India is ₹ 30,00,00,000/- (Rupees Thirty crores only) divided into 300,00,000 (Three crores only) equity shares of ₹ 10/- each and the total paid-up capital is ₹ 27,00,00,000/- (Rupees Twenty Seven Crores only). The object of the Bycell India is to carry out the business to manufacture, produce, assemble, repair, install, maintain, convert, export, import etc., in all kinds of items, system, equipment, plants, machines, or things of communications of different models and uses in all branches such as telecommunications, radio communications, satellite communications, wireless communications, space communications etc. The detailed objects are available in the Memorandum of Association which has been placed on record (Annexure P/3). 4. The petitioner cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the Letter of Intent and failed to obtain a formal license for operating mobile service in this country. The fee paid by the Bycell India for obtaining license has been withheld. In that regard arbitral proceeding between the Bycell India and the Government of India are pending adjudication before International Arbitral Tribunal in London. 7. On account of refusal of license to Bycell India it could not commence its business ever since its inception. There was no major cash inflow in respect of Bycell India which resulted in deterioration of its financial health. The petitioner was paid less salary for the month of May and June 2011. However, the Bycell India requested the petitioner to continue to render his services to it although it was not in a position to make payment of full salary. It had promised as and when it would receive the sum of ₹ 23 crores from the Govt. of India it would make good the dues of the petitioner (Annexure P/7). Accordingly, the petitioner continued rendering services to Bycell India. 8. According to the averments made by the petitioner a settlement was entered into between him and the Bycell India. In the settlement Bycell India had agr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 600000 retention fee April 2015 to December 2015 450000 payment received =$33000= ₹ 2042661 8679947 -2042661 Balance due 6637286 10. The petitioner eventually served a statutory legal notice on Bycell India on 07.05.2016 by speed post, courier service and electronic communication (email). The statutory legal notices were returned back with the endorsement left . Even the email bounced back with the comments Domain name of email address not valid . The original return envelope containing statutory legal notice has been placed on record (Annexure P/12). 11. Bycell India however sent a reply through its advocate on 24.05.2016 for not making balance payment (Annexure P/13). The company master data establishes the fact that its financial health is extremely weak as it has not even filed its annual return with the Registrar of Companies subsequent to the year 2010-11. A copy of the latest balance sheet for the financial year 2010- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he statutory records and books of account of the company; and (vii) the list of immovable assets, land and building etc. of the respondent along with full particulars thereof sufficient to accurately identify locate the said assets. A copy of the company petition filed before the Hon'ble Delhi High Court and a copy of the instant petition filed before this Tribunal have been sent by speed post to the respondent on 22.02.2017. The petition has, however, not named any insolvency professional. 13. In the reply/objection filed by the Operational debtor the stand taken is that the Hon'ble High Court of Delhi transferred the winding up petition on 14.02.2017 by virtue of provisions of Rule 5 of the Companies (Transfer of Proceedings) Rules, 2016. On the hearing of the petition by this Tribunal the petitioner was directed to file compliance affidavit in terms of the aforesaid Transfer Rules within two weeks from the date of the order dated 29.03.2017. The application purporting to show compliance of the various provisions of Insolvency and Bankruptcy Code, 2016 was filed by the petitioner on 07.04.2017. In the aforesaid background the respondent has raised objection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the amounts due from 2011-2016. 15. There is a dispute as the claim of the petitioner has already been disputed by Bycell India. The respondent has settled all the outstanding dues with the petitioner by making payment of Rs. USD 33,000 on 03.02.2014 and no further amount is due and payable to the petitioner. There is a fatal defect as no notice has been given by the corporate debtor relating to a dispute of unpaid operational debt as per the requirement of Section 9(3)(b) of the Code. 16. Learned counsel for the petitioner has raised two principal argument before us. Firstly, it has been submitted that the provisions of Section 433 of the Companies Act, 1956 would continue to apply and the relief must be given under that provisions. It has also been suggested that the amended provisions of Companies Act, 2013 as substituted by the Insolvency and Bankruptcy Code, 2016 would not be applicable because the rights of the petitioner stand crystalized and vested on the date when the Company petition was filed before the Hon'ble Delhi High Court in July, 2016. According to the learned counsel law as was applicable on the aforesaid date would continue to apply and not any sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice sent by the petitioner and delivered to the respondent. Even affidavit has not been filed which was required to the effect that there is no notice given by the Corporate debtor relating to a dispute of the unpaid operational debt. 21. Having heard learned counsel for the parties and after perusing the record with their able assistance the first question which needs determination is whether the provisions of Section 433 of the Companies Act, 1956 continue to apply or the provisions of Insolvency and Bankruptcy Code, 2016 would come applicable. Learned counsel for the petitioner has vehemently argued for continued application of the provisions of the Companies Act, 1956 by placing reliance on a judgment of the Hon'ble Supreme Court rendered in the case of R. Radhakrishnan (supra). 22. In that regard, it would first be appropriate to examine the changes brought about in the provisions of Section 433(e) which deals with winding up of a Company in the circumstance of inability to pay its debts. The provisions have been deleted from the Companies Act and in the new Companies Act, 2013 there is no provision made for winding up of a company parallel to the one available u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by- (a) the company; (b) any contributory or contributories; (c) all or any of the persons specified in clauses (a) and (b); (d) the Registrar; (e) any person authorised by the Central Government in that behalf; or (f) in a case falling under clause (b) of section 271, by the Central Government or a State Government. (2) A contributory shall be entitled to present a petition for the winding up of a company, notwithstanding that he may be the holder of fully paid-up shares, or that the company may have no assets at all or may have no surplus assets left for distribution among the shareholders after the satisfaction of its liabilities, and shares in respect of which he is a contributory or some of them were either originally allotted to him or have been held by him, and registered in his name, for at least six months during the eighteen months immediately before the commencement of the winding up or have devolved on him through the death of a former holder. (3) The Registrar shall be entitled to present a petition for winding up under section 271, except on the grounds specified in clause (a) or clause (e) of that sub-section: Provided tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iance on earlier judgment of the Constitution Bench of the Supreme Court rendered in Shyam Sunder v. Ram Kumar [2001] 8 SCC 24 and on behalf of the petitioner reliance has been placed on the proposition culled out in that judgment which is evident from the following paras:- 28. From the aforesaid decisions the legal position that emerges is that when a repeal of an enactment is followed by a fresh legislation, such legislation does not affect the substantive rights of the parties on the date of suit or adjudication of suit unless such a legislation is retrospective and a court of appeal cannot take into consideration a new law brought into existence after the judgment appealed from has been rendered because the rights of the parties in an appeal are determined under the law in force on the date of suit. However, the position in law would be different in the matters which relate to procedural law but so far as substantive rights of parties are concerned, they remain unaffected by the amendment in the enactment. We are, therefore, of the view that where a repeal of provisions of an enactment is followed by fresh legislation by an amending Act, such legislation is prospective in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sis of principles enunciated by the Constitution Bench in the case of Shyam Sunder (supra), K.S. Paripooran v. State of Kerala [1994] 5 SCC 593, R. Rajagopal Reddy v. Padmini Chandrasekharan AIR 1996 SC 238 and the judgment rendered in R. Radhakrishnan (supra) it cannot be concluded that the omission x x x x x x x of Section 433 (e) of the Companies Act and its substitution by the provisions of Insolvency and Bankruptcy Code, 2016 has taken away any substantive or vested right of the petitioner. By virtue of the provisions of the Insolvency and Bankruptcy Code, 2016 the right has been reregulated and the procedure for its adjudication has undergone some changes. Even the forum of adjudication has undergone change. Such a course is available to the legislature has already been affirmed by a judgment of the Constitution Bench of Hon'ble the Supreme Court rendered in the case of Madras Bar Association v. Union of India [2015] 57 taxmann.com 289/131 SCL 26 upholding the constitutional validity for setting up the National Company Law Tribunal and National Company Law Appellate Tribunal. It has been held that the creation of Tribunal and vesting in them, the powers and jurisdiction e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) a demand notice in Form 3; or (b) a copy of an invoice attached with a notice in Form 4. (2) The demand notice or the copy of the invoice demanding payment referred to in sub-section (2) of section 8 of the Code, may be delivered to the corporate debtor, (a) at the registered office by hand, registered post or speed post with acknowledgement due; or (b) by electronic mail service to a whole time director or designated partner or key managerial personnel, if any, of the corporate debtor. (3) A copy of demand notice or invoice demanding payment served under this rule by an operational creditor shall also be filed with an information utility, if any. 6. The application for initiation of corporate insolvency resolution process, thereafter can be filed by Operational Creditor after expiry of period of 10 days from the date of delivery of notice or invoice demanding payment, as provided under sub-section (1) of section 9. 8. Admittedly, no notice was issued by Operational Creditor under section 8 of the I B Code, 2016. Demand notice by Operational Creditor stipulated under Rule 5 in Form 3 has not been served. Therefore, in absence of any expiry ..... X X X X Extracts X X X X X X X X Extracts X X X X
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