Petition under Insolvency Code dismissed; notice of demand service failure cited. Operational creditor can explore other avenues.

The Tribunal rejected the petition filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 against the Corporate Debtor due to the failure in the service of the notice of demand. The petition was dismissed on grounds of maintainability as the notice of demand was sent by a different entity, rendering it unsustainable under the Code. Despite the rejection, the operational creditor was permitted to seek other avenues for their claim, with the Registry directed to inform them promptly to explore alternative forums if desired.

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Issues:
1. Invocation of Section 9 of the Insolvency and Bankruptcy Code, 2016 against the Respondent for initiating Corporate Insolvency Resolution Process.
2. Allegations of default in payment by the Corporate Debtor.
3. Response filed by the Corporate Debtor, disputing the delivery of demand notice and regular payment claims.
4. Observations regarding the failure of delivery of notice of demand by the Operational Creditor.
5. Rejection of the petition based on the issue of maintainability arising from the service of notice of demand.
6. Permission for the operational creditor to approach other forums regarding the claim.

Analysis:
The petition was filed by Kutch Chemical invoking Section 9 of the Insolvency and Bankruptcy Code, 2016 against the Respondent, alleging default in payment. Kutch Chemical claimed that the Corporate Debtor, VMA Chemicals, had defaulted in making payments for goods supplied since January 2017, resulting in an outstanding amount of Rs. 43,80,765 as of October 1, 2018. The demand notice was delivered to the Corporate Debtor, but no payment was made nor any dispute raised by the Corporate Debtor.

In response, the Corporate Debtor contended that no demand notice was received and challenged the maintainability of the petition under Section 9. They acknowledged some delay in payments but claimed regular payments were being made to the petitioner. The Tribunal observed that the notice of demand was sent by Panoli Intermediates India Pvt. Ltd. instead of Kutch Chemicals, rendering the application liable to be rejected. Citing a precedent, the Tribunal held that the failure of proper delivery of the notice of demand made the petition unsustainable under Section 9(5)(ii)(c) of the Insolvency and Bankruptcy Code, 2016.

The Tribunal rejected the petition based on the issue of maintainability due to the failure in the service of the notice of demand. The order of rejection, however, did not prevent the operational creditor from seeking other avenues for the claim. The Registry was directed to communicate the order to the Operational Creditor promptly, allowing them to explore alternative forums for their claim if desired.

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