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TMI Blog2023 (12) TMI 314X X X X Extracts X X X X X X X X Extracts X X X X ..... te Debtor, a factum which has been seriously contested by the Corporate Debtor. Further it is the case of the Appellant that the proof of service claimed by the Operational Creditor was wrong proof of service. In view of the mandatory provision under Section 8 of IBC read with Rule 5 of Insolvency and Bankruptcy, (Application to Adjudicating Authority) Rules, 2016 which entails that for initiation of insolvency resolution by an Operational Creditor a demand notice has to be served by the unpaid Operational Debtor on the Corporate Debtor, the contention of the Appellant deserves due consideration. The order of the Adjudicating Authority is silent on the actual delivery of the Section 8 notice which is a bone of contention between the two parties - this aspect needs to be appropriately examined and hence matter remanded back to the Adjudicating Authority to consider the Section 9 application afresh with particular reference to actual and proper delivery of the demand notice on the Corporate Debtor. Appeal allowed by way of remand. - [ Justice Ashok Bhushan ] Chairperson And [ Barun Mitra ] Member ( Technical ) For the Appellant : Mr. Raghenth Basant , Ms. Anne Mathe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ionable and the Adjudicating Authority should have verified this aspect before considering the Section 9 application. In support of their contention, the Learned Counsel of the Appellant has referred to the judgment of this Tribunal in the matter of Shailendra Sharma, Director of R M International Pvt. Ltd. v. Ercon Composites 2021 SCC OnLine NCLAT 3 which held that an application filed under Section 9 of the IBC without serving notice under Section 8 is not maintainable and failure to serve the demand notice is not a curable defect. 4. It has also been submitted that the address of the Corporate Debtor at which the said demand notice was allegedly sent was also not the registered address of the Corporate Debtor but had been wrongly sent to the corporate office of the Corporate Debtor. Contending that this service of statutory notice on the Corporate Debtor at its registered office renders the process of service to be contrary to the scheme of IBC and therefore legally unsustainable. It is the case of the Appellant that the Operational Creditor has failed to provide proof of correct service of notice on the Corporate Debtor. Even the grounds cited by the Advocate for the Operati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 9 application is barred by limitation was also found to have been devoid of substance by the Adjudicating Authority at paragraphs 16-18. 8. We have duly considered the arguments advanced by the Learned Counsel for the parties and perused the records carefully. 9. To appreciate the facts of the case, at the outset, it would be useful to refer to Sections 8 and 9 of the IBC read with Rule 5 of the Insolvency and Bankruptcy, (Application to Adjudicating Authority) Rules, 2016: 8. Insolvency resolution by operational creditor- (1) An operational creditor may, on the occurrence of a default, deliver a demand notice of unpaid operational debtor copy of invoice demanding payment of the amount involved in the default to the corporate debtor in such form and manner as may be prescribed. (2) The corporate debtor shall, within a period of ten days of the receipt of the demand notice or copy of the invoice mentioned in sub-section (1) bring to the notice of the operational creditor - (a) existence of a dispute, if any, or record of the pendency of the suit or arbitration proceedings filed before the receipt of such notice or invoice in relation to such dispute; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e unpaid operational debt; (c) the invoice or notice for payment to the corporate debtor has been delivered by the operational creditor; (d) no notice of dispute has been received by the operational creditor or there is no record of dispute in the information utility; and (e) there is no disciplinary proceeding pending against any resolution professional proposed under sub-section (4), if any. Provided that Adjudicating Authority, shall before rejecting an application under sub clause (a) of clause (ii) give a notice to the applicant to rectify the defect in his application within seven days of the date of receipt of such notice from the adjudicating Authority. (6) The corporate insolvency resolution process shall commence from the date of admission of the application under sub-section (5) of this section Rule 5 Insolvency and Bankruptcy, (Application to Adjudicating Authority) Rules, 2016 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. (2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant has vehemently contended that these grounds cited by the Advocate for the Operational Creditor on failure to give proof of service of Section 8 notice on the Corporate Debtor are flimsy and lack credulity. Moreover, we also notice that admittedly the Section 8 notice was sent to the corporate office and not to the registered office of the Corporate Debtor. 12. There is no doubt in our minds that in terms of the statutory construct of the IBC, an application for initiation of corporate insolvency resolution process can be filed by Operational Creditor only after expiry of period of 10 days from the date of delivery of the Section 8 demand notice on the Corporate Debtor. If we look at the impugned order, it has held at paragraph 19 that the Corporate Debtor was served with a notice dated 04.11.2019 which notice was not responded to by the Corporate Debtor. However, there is no specific finding recorded on whether the notice was actually served on the Corporate Debtor, a factum which has been seriously contested by the Corporate Debtor. Further it is the case of the Appellant that the proof of service claimed by the Operational Creditor was wrong proof of service. 13. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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