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TMI Blog2025 (2) TMI 594X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 8 or that the CD had already paid the operational debts. The argument raised by the Appellant that since there was no reply to the notice issued under Section 8(1) of the Code, therefore, the CD could not have contested the application filed under Section 9 by filing a reply thereto is totally misplaced because Section 8 travels in a different direction then an application filed under Section 9. Section 8 lays an obligation upon the OC to serve the notice if he had to maintain the application under Section 9 because the language employed in Section 9 of the Code is that the OC had to wait for 10 days from the date of delivery of notice or the invoice, prescribed under Section 8 (1) of the Code and if he does not receive payment from the CD or any notice of dispute as prescribed under Section 8(2) then only the OC can file an application otherwise the application is not maintainable. Conclusion - Notice under Section 8 is a sine qua non for maintaining an application under Section 9 but if the notice under Section 8 is not replied by the CD for some reason or other it does not debar the CD to contest the application filed under Section 9 of the Code by raising its defence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilitation fee/compensation was 50% of the compensation payable against the mobilization advance and balance of 50% in 12 equal monthly instalments within one year from the signing of the contract agreement for the project. 5. It is further alleged that the CD and Iyenger, Director of the Appellant entered into an agreement on 25.11.2018 as per which Mr. Iyengar was appointed as wholetime director of the CD from 01.12.2018 and the said agreement stipulated payment of compensation for the services of Mr. Iyengar to the OC upon presentation of invoice by OC. It is alleged that on 25.08.2018 a contract was procured from Gujarat by RBPIL for 20 MLD at Rs. 2.17 Cr. with 10% mobilization advance, balance as per milestone events noted in the MOU. The office space was also acquired by the OC at Gurgaon on 13.12.2018 on lease to run the functions of the CD under the MOU and agreement. The CD got three work orders from three companies based in Gujarat through the OC. It is alleged that instead of making the payment to the OC, the CD sent a notice dated 18.07.2020 asking Mr. Iyengar to resign from its board. As a result of the aforesaid, it is alleged that OC served a demand notice under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MLD terms detailed as per Annexure I" and "50% of the Compensation value as Clause 6(a) will be payable against mobilization advance and balance 50% in twelve equal monthly instalments within one year from the date of signing of the Contract Agreement for the 'Project' as per Annexure I. 9. Though there is no tangible dispute in relation to claim of Rs. Rs. 48.95 lakhs as Facilitation Fees towards award of 19.6 MLD projects, out of which Rs. 22.21 lakhs is already paid. This bench finds that the corporate debtor has also disputed its obligation to pay Rs.15 Lakhs towards remuneration of Mr. Chackravarthi D. Iyengar in terms of WhatsApp acceptance, but the dispute in relation thereto appears to be a feeble argument. Accordingly, this bench finds that a sum of Rs.41. 74 lakhs is due and payable. About claim of Rs. 30 lakhs towards travel cost and Rs.57.94 as lump sum compensation being proportionate technology selling price in relation to 6 other projects, this bench finds that a compensation was inclusive of all cost and payable upon occurrence of stated milestones. Whether such sums are payable in terms of MOU or not is a matter of determination which cannot be taken up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notice issued under Section 8 of the Code? 10. In order to answer this question, it is relevant to refer to Section 8 and 9 of the Code which are reproduced as under:- " Section 8. (1) An operational creditor may, on the occurrence of a default, deliver a demand notice of unpaid operational debtor copy of an 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, and record of the pendency of the suit or arbitration proceedings filed before the receipt of such notice or invoice in relation to such dispute; (b) the repayment of unpaid operational debt- (i) by sending an attested copy of the record of electronic transfer of the unpaid amount from the bank account of the corporate debtor; or (ii) by sending an attested copy of record that the operational creditor has encashed a cheque issued by the corporate debtor. Explanation.-For the purposes of this sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the corporate debtor, if- (a) the application made under sub-section (2) is incomplete; (b) there has been repayment of the unpaid operational debt; (c) the creditor has not delivered the invoice or notice for payment to the corporate debtor; (d) notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility; or (e) any disciplinary proceeding is pending against any proposed resolution professional: Provided that Adjudicating Authority, shall before rejecting an application under subclause (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." 11. As per Section 8(1) the form and manner in which notice under Section 8 has to be issued is prescribed in Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (in short 'Rules') which is reproduced as under:- "5. Demand notice by operational cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... INFORMATION UTILITY (IF ANY) 6. PROVISION OF LAW, CONTRACT OR OTHER DOCUMENT UNDER WHICH DEBT HAS BECOME DUE 7. LIST OF DOCUMENTS ATTACHED TO THIS APPLICATION IN ORDER TO PROVE THE EXISTENCE OF OPERATIONAL DEBT AND THE AMOUNT IN DEFAULT 3. If you dispute the existence or amount of unpaid operational debt (in default) please provide the undersigned, within ten days of the receipt of this letter, of the pendency of the suit or arbitration proceedings in relation to such dispute filed before the receipt of this letter/notice. 4. If you believe that the debt has been repaid before the receipt of this letter, please demonstrate such repayment by sending to us, within ten days of receipt of this letter, the following: (a) an attested copy of the record of electronic transfer of the unpaid amount from the bank account of the corporate debtor; or (b) an attested copy of any record that [name of the operational creditor] has received the payment. 5. The undersigned, hereby, attaches a certificate from an information utility confirming that no record of a dispute raised in relation to the relevant operational debt has been filed by any person at any information utility. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or], hereby submits this application to initiate a corporate insolvency resolution process in the case of [name of corporate debtor]. The details for the purpose of this application are set out below: Part - I PARTICULARS OF APPLICANT 1. NAME OF OPERATIONAL CREDITOR 2. IDENTIFICATION NUMBER OF OPERATIONAL CREDITOR (IF ANY) 3. ADDRESS FOR CORRESPONDENCE OF THE OPERATIONAL CREDITOR Part - II PARTICULARS OF CORPORATE DEBTOR 1. NAME OF THE CORPORATE DEBTOR 2. IDENTIFICATION NUMBER OF CORPORATE DEBTOR 3. DATE OF INCORPORATION OF CORPORATE DEBTOR 4. NOMINAL SHARE CAPITAL AND THE PAIDUP SHARE CAPITAL OF THE CORPORATE DEBTOR AND/OR DETAILS OF GUARANTEE CLAUSE AS PER MEMORANDUM OF ASSOCIATION (AS APPLICABLE) 5. ADDRESS OF THE REGISTERED OFFICE OF THE CORPORATE DEBTOR 6. NAME, ADDRESS AND AUTHORITY OF PERSON SUBMITTING APPLICATION ON BEHALF OF OPERATIONAL CREDITOR (ENCLOSE AUTHORISATION) 7. NAME AND ADDRESS OF PERSON RESIDENT IN INDIA AUTHORISED TO ACCEPT THE SERVICE OF PROCESS ON ITS BEHALF (ENCLOSE AUTHORISATION) 8. DETAILS OF THE CORPORATE DEBTOR AS PER THE NOTIFICATION UNDER SECTION 55 (2) OF THE CODE - (i) ASSETS AND INCOME (ii) CLASS O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion through [state means of payment] on [date]. Yours sincerely, Signature of person authorised to act on behalf of the operational creditor Name in block letters Position with or in relation to the operational creditor Address of person signing Instructions Please attach the following to this application: Annex I Copy of the invoice / demand notice as in Form 3 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 served on the corporate debtor. Annex II Copies of all documents referred to in this application. Annex III Copy of the relevant accounts from the banks/financial institutions maintaining accounts of the operational creditor confirming that there is no payment of the relevant unpaid operational debt by the operational debtor, if available. Annex IV Affidavit in support of the application in accordance with the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. Annex V Written communication by the proposed interim resolution professional as set out in Form 2 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. [WHEREAPPLICABLE] Annex VI Proof th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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