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TMI Blog2023 (7) TMI 265X X X X Extracts X X X X X X X X Extracts X X X X ..... Debtor. The Operational Creditor is at liberty to submit Demand Notice either in Form-3 or Form-4. When Notice is issued in Form-4, copy of the Invoice is required to be attached with the Notice. The Demand Notice issued by the Operational Creditor was in Form-3, hence, no infirmity can be found in the Demand Notice, if invoices were not attached. In the Application, which was filed under Section 9 Demand Notice dated 15.10.2018 clearly mentions that debt of 92,70,000/- is due and payable on the basis of supply, installation, testing and commission Agreement dated 05.02.2013 - the basis of the Demand Notice was Supply Agreement and acknowledgement letter issued by the Corporate Debtor. No invoices were referred to in the Demand Notice. Hence, submission of the Appellant that Demand Notice should have been accompanied with the invoices cannot be accepted. The present is a case where the Demand Notice issued by the Operational Creditor on the basis of supply and installation Agreement and the acknowledgement letter issued by the Corporate Debtor. In the facts of the present case, Notice having not been issued in Form-4, cannot be faulted with. There can be no defect and infirm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncy) No. 262 of 2023 & I.A. No. 1122, 1124 & 1167 of 2023 - - - Dated:- 4-7-2023 - [ Justice Ashok Bhushan ] Chairperson And [ Barun Mitra ] Member ( Technical ) For the Appellant : Mr. Mohit Chaudhary , Mr. Prakhar Mithal , Advocates For the Respondents : Mr. Sandeep Thukral for R-1. Mr. Abhijeet Sinha, Mr. Aditya Soni, Mr. Saikat Sarkar, Ms. Heena Kochar, Advocates for R-3. Mr. Iswar Mohapatra, Advocate for IRP. Mr. Surjeet Bhadu, Mr. Abhishek Anand, Advocates for Intervenor JUDGMENT ASHOK BHUSHAN, J. This Appeal has been filed by the Suspended Director of the Corporate Debtor challenging the order dated 27.02.2023 passed by the National Company Law Tribunal, Chandigarh Bench, Chandigarh admitting Section 9 Application filed by Operational Creditor Kone Elevator India Pvt. Ltd. 2. Brief facts of the case are : (i) The Operational Creditor is engaged in the business of manufacturing, commissioning/ installation and providing after sales service for lift manufactured by the Operational Creditor. Future Colonizer and Construction Pvt. Ltd. ( FCCPT ) had approached the Operational Creditor for supply and installation of Kone elevators for its proje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one Sanjeev Chadha, seeking impleadment in the Appeal. In the IA, the Applicant stated that debt owned by M/s Kone Elevators India Pvt. Ltd., Operational Creditor is assigned to the Applicant vide Agreement dated 03.02.2023, i.e., before passing of the impugned order, hence, the Applicant be impleaded as one of the Respondent. This Tribunal vide order dated 20.03.2023 allowed the IA No.1122 of 2023 impleading the Applicant as Respondent No.3. 4. When the Appeal was heard on 02.03.2023, the Appellant offered to deposit an amount of Rs.35 lakhs. The Appellant was permitted to deposit the amount by an order dated 02.03.2023 and on which date an interim order was also passed directing that in pursuance of the impugned order dated 27.02.2023, no further steps shall be taken. By order dated 02.03.2023, Homebuyers who sought liberty to file Application, were permitted to file Application and IA No.1167 of 2023 has been filed by 55 Allottees, seeking impleadment as Intervenors in the Appeal. Reply on behalf of Respondent No.3 has been filed in the Appeal. 5. We have heard Shri Mohit Chaudhary, learned Counsel for the Appellant; Shri Sandeep Thukral, learned Counsel appearing for Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ving acknowledged the operational debt, the argument that no operational debt is due is meaningless. Respondent No.3 has been impleaded by order of this Tribunal dated 20.03.2023, which order has been unsuccessfully challenged by the Appellant before the Hon ble Supreme Court by filing Civil Appeal No.3181 of 2023, which was dismissed on 08.05.2023. The assignment of debt was assigned by the Operational Creditor in favour of Respondent No.3 and on the strength of which assignment, Respondent No.3 is fully entitled to support the impugned order. Learned Counsel for Respondent No.1 adopted the submission made on behalf of Respondent No.3. 8. The learned Counsel for the IRP submits that in pursuance of the publication issued by IRP, claims of more than Rs.200 crores have been received. 9. The learned Counsel for the Intervenors appearing for the Allottees submits that Allottees who were Financial Creditors of the Corporate Debtor have filed their claims. The Allottees also submitted that they had already filed an Application under Section 7 being CP(IB) No.210 of 2020 against the Corporate Debtor where claim of Rs.121.47 crores was made. It is submitted by learned Counsel for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2018 was properly served. The same has been delivered to the corporate debtor vide registered post on 18.10.2018 to the registered office as well as Delhi office. The post was delivered at the registered address, the tracking report and postal receipts are attached at Annexure XIII and XIV of the petition. However, the post at the Delhi office, notice was returned undelivered with the remark 'Left Without Address' (Annexure-XV). Therefore, the demand notice was properly served but corporate debtor has not replied to the same. 13. When in the Section 9 Application, the Operational Creditor has filed the original postal receipt for dispatch of Notice and service of Notice from the website of Postal Department and there being no challenge to the service report downloaded from the website of the Postal Department, there is no infirmity in the finding of the Adjudicating Authority that Demand Notice was served. It is further relevant to notice that in the Settlement Agreement, which was entered between the Operational Creditor and the Corporate Debtor on 27.09.2021, the Settlement Agreement also referred to Demand Notice dated 15.10.2018 sent on 18.10.2018. The Settlem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 719 was executed by and between the Applicant Company and FCCPT for the purpose of supply, installation, testing and commissioning of the elevators, covering the commercial terms and conditions of the transaction, copy of Supply, Installation, Testing and Commissioning (SITC) Agreement dated 05.02.2013 is filed as Annexure-IV. 5. That pursuant to the execution of the said SITC Agreement, Applicant Company had delivered and installed passenger lifts in the project site and raised invoice for a sum of Rs.82,68,620/- (Rs.Eighty Two Lakh Sixty Eight Thousand Six Hundred Twenty Only). FCCPT after the receipt of the passenger lifts made a part payment of a sum of Rs.10,30,000/- (Rs. Ten Lakh Thirty Thousand Only) leaving behind a balance of Rs.72,38,620/- (Rs. Seventy Two Lakh Thirty Eight Thousand Six Hundred Twenty Only), copy of invoice is filed As Annexure-V. 6. That by virtue of certain disputes between the Corporate Debtor Company and FCCPT, FCCPT abandoned the site and did not make the payment to the Applicant Company as aforesaid. It is submitted that vide letter dated 12.07.2013, the Corporate Debtor being the owner of the side acknowledged the dues of the Applicant Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of learned Counsel for the Appellant that Demand Notice was defective, having been issued in Form-3 and there being no invoices attached to the Notice. The Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, Rule 5 deals with Demand Notice by Operational Creditor. Rule 5, sub-rule (1) provides as follows: 5. Demand notice by operational creditor. (1) An operational creditor shall deliver to the corporate debtor, the following documents, namely.- (a) a demand notice in Form 3; or (b) a copy of an invoice attached with a notice in Form 4. 18. The Operational Creditor is at liberty to submit Demand Notice either in Form-3 or Form-4. When Notice is issued in Form-4, copy of the Invoice is required to be attached with the Notice. The Demand Notice issued by the Operational Creditor was in Form-3, hence, no infirmity can be found in the Demand Notice, if invoices were not attached. In the Application, which was filed under Section 9 Demand Notice dated 15.10.2018 clearly mentions that debt of 92,70,000/- is due and payable on the basis of supply, installation, testing and commission Agreement dated 05.02.2013. The Demand Notice further refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the option of delivering a demand notice of the unpaid operational debt or raising an invoice demanding payment of the amount involved. The two options available for initiation of Corporate Insolvency Process are provided to deal with all the eventualities that may occur. For example, if an operational debt is in the nature of salary dues, then in that situation, the question of submitting an invoice does not arise. To deal with such a situation, Section 8 contains the provision for issuance of demand notice of the unpaid operational debt. Form 3 of the Adjudicating Authority Rules has only laid down the condition that the applicant has to give the details of the amount of debt, details of the transaction on account of which such debt fell due and the date from which such debt fell due, and as per Column 7 of the said Form 3, applicant has to attach the documents to prove the existence of operational debt and the amount in default. Likewise, where the operational debt involves the generation of the invoice, then in that case, invoice raising the demand may be sent to the Corporate Debtor demanding the invoice amount. In such a situation, the Operational Creditor has to issue the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to KONE that COPL shall ensure that the post dated cheques are honoured on their first presentation. In case of default and dishonour of the cheques, KONE shall be entitled to continue with the existing pending proceedings before the NCLT and to take initiate any other legal proceedings as may be advised to them to claim the entire claim amount of Rs.92,70,000/- (after adjusting the amount received) with interest @ 12% per annum and costs. The breakup of the payment shall be as under: a. Demand Draft no.009371 dated 27.09.2021 for an amount of Rs.25,00,000/- in favor of KONE Elevator India Pvt. Ltd. b. HDFC Bank Cheque no.000901 dated 15.12.2021 for an amount of Rs.20,00,000/- in favor of KONE Elevator India Pvt. Ltd. c. HDFC Bank Cheque no.000902 dated 15.03.2022 for an amount of Rs.15,00,000/- in favor of KONE Elevator India Pvt. Ltd. 4. The parties have further agreed that the terms and conditions recorded in the Settlement Agreement are final towards the entire obligations of both parties against the SITC agreement referred above and that this settlement agreement is irrevocable and shall not be reopened are questioned by the parties in any manner whatsoe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fault was committed by the Corporate Debtor. Hence, no exception can be taken to the admission of Section 9 Application. It is further relevant to notice that at the time of admission of the Appeal, the Appellant offered to deposit an amount of Rs.35 lakhs, which according to the Appellant was the amount due and payable and for which the default was committed, but as noted above, there being breach in the Settlement Agreement and Corporate Debtor having failed to make the payment as per the Settlement Agreement, the amount for which the Application was initiated became due and the payment of Rs.35 lakhs in no manner can satisfy the entire debt and due. The Settlement Agreement having breached, the Appellant cannot insist to accept the Settlement Agreement at this stage. 24. The learned Counsel for the Appellant submitted that Assignment Agreement in favour of Respondent No.3 is void and inoperative. It is submitted that Assignment Agreement is an unstamped document and cannot be relied. The learned Counsel for the Appellant has relied on judgments of the Hon ble Supreme Court in Khardah Company Ltd. vs. Raymon Co (India) Pvt. Ltd. AIR (1962) SC 1810 and M/S. N.N. Global Merc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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