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TMI BlogCorporate Insolvency Resolution Process by Operational Creditor [ Section 8 ]X X X X Extracts X X X X X X X X Extracts X X X X ..... d 31.08.2017 The Supreme Court held that the scheme of section 7 stands in contrast with the scheme under section 8 where an OC is, on the occurrence of a default, to first deliver a demand notice of the unpaid debt to the operational debtor in the manner provided in section 8(1) of the Code. Time Period to revert by the Corporate Debtor [ Section 8(2) ] The corporate debtor shall, within a period of 10 days of the receipt of the demand notice or copy of the invoice mentioned in section 8(1) bring to the notice of the operational creditor- (a) existence of a dispute, if any, or and record of the pendency of the suit or arbitration proceedings filed before the receipt of such not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 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. Some Judicial Interpretation of Section 8 by Supreme Court / NCLAT A dispute must truly exist in facts and should not be spurious, hypothetical and illusory. [ Vishal Vijay Kalantri Vs. DBM Geotechnics Constructions Pvt. Ltd. Anr. Supreme Court, dated 20.07.2020 ]. The moment there is pre-existence of a dispute, the OC gets out of the clutches of the Code. [ Innoventive Industries Ltd. Vs. ICICI Bank Anr. Supreme Court, dated 31.08.2017 ] The expression an operational creditor may on the occurrence of a default deliver a demand noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re a court of law. Such pendency actually amounts to admission of debt and not an existence of dispute. [ Sudhi Sachdev Vs. APPL Industries Ltd. NCLAT , dated 13.11.2018]. The legislative intent of issuance of demand notice under section 8(1) is not a mere formality but a mandatory provision. [ Prajna Prakash Nayak Vs. ASAP Info Systems Pvt. Ltd. Anr. NCLAT , dated 11.07.2018 ]. The CD can show and satisfy the AA that a default has not occurred in the sense that the debt, which may also include a disputed claim, is not due or payable in law or in fact. [ Neha Himatsingka Anr. Vs. Himatsingka Resorts Pvt. Ltd. Anr. NCLAT , dated 30.11.2018]. The OC had a relief open under the MSME Act and utilising the same does ..... X X X X Extracts X X X X X X X X Extracts X X X X
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