2017 (8) TMI 425 - Tri - Insolvency and Bankruptcy

Operational Creditor's Petition Dismissed for Non-Compliance with IBC Rules

S2 Infotech International Limited Versus M/s. Intarvo Technologies Pvt. Limited

The Tribunal dismissed the Operational Creditor's petition against the Corporate Debtor for unpaid dues due to non-compliance with procedural formalities ... Maintainability of petition - petitioner claiming to be the Operational Creditor as against the Respondent Company/Corporate Debtor - Held that:- Even though the claim which remains unanswered as per the statement of the Petitioner/Operational Creditor to the extent of ₹ 8,28,394/-, which is well the above statutory minimum of ₹ 100,000 fixed by IBC, 2016 for maintaining a petition, the Operational Creditor does not seem to have complied with the mandatory requirement of serving notice of default as well as notice of application on the Corporate Debtor at its registered office nor complied with the provisions of Sub-Section (3) of Section (9) in relation to documents to be annexed along with the application, in the sense that a copy of certificate from the financial institution maintaining the accounts of the Operational Creditor confirming that there is no payment of unpaid operational debt by the Corporate Debtor which has not been furnished before this Tribunal. While the dispatch of notice of demand seems to have been sent as per the postal receipt dated 7.2.2017 to the registered office of the company located at Okhla Industrial Estate, however, no satisfactory proof of service of notice of default has been enclosed for our verification. Further, in relation to the notice of application sent by the Petitioner dated 7.6.2017, a tracking report has been produced by the Petitioner as Annexure-A to the additional affidavit filed on 6.7.2017 which shows that on 5.6.2017 an attempt to deliver the postal cover has been made but 'remains unclaimed' and in the circumstances we do not have any other option other than to conclude that both demand notice and the notice of application has not been served on the financial debtor as required under the provisions of IBC, 2016 read with 'AAA' Rules. Considering all the above, the application requires to be dismissed. Issues:Claim by Operational Creditor against Corporate Debtor for unpaid balance amount - Compliance with procedural formalities under Insolvency & Bankruptcy Code, 2016.Detailed Analysis:1. Claim and Relationship Between Parties:- The petitioner, an Operational Creditor, filed a petition against the Respondent Company for unpaid dues arising from services provided as per the Agreement entered into between the parties.- The invoices raised were required to be paid within 30 days, with a specific outstanding amount due from the Corporate Debtor.2. Notice of Default and Application:- The petitioner issued a notice under Section 8 of the Insolvency & Bankruptcy Code, 2016, demanding payment of the unpaid balance amount.- Despite reminders and notices, the amount remained unpaid, leading the Operational Creditor to file a petition before the Tribunal.3. Compliance with IBC, 2016 Provisions:- The Tribunal revisited the provisions of IBC, 2016, emphasizing the mandatory requirement for the Operational Creditor to issue a notice of default to the Corporate Debtor.- The application for initiating Corporate Insolvency Resolution Process under Section 9(1) required specific documents to be furnished along with the application.4. Non-Compliance and Dismissal of Petition:- The Tribunal noted the non-compliance by the Operational Creditor in serving the notice of default and application on the Corporate Debtor as required by IBC, 2016 and 'AAA' Rules.- Lack of satisfactory proof of service of notices and missing documents led to the dismissal of the petition for non-compliance with procedural formalities.5. Dismissal and Future Recourse:- The Tribunal dismissed the application without costs but stated that the dismissal at the initial stage does not prevent the Petitioners from seeking relief from other courts.- The decision was based on the failure to adhere to the mandatory procedural requirements, emphasizing the importance of strict compliance with the provisions of IBC, 2016.This detailed analysis highlights the key aspects of the judgment, focusing on the claim, notice requirements, compliance with IBC, 2016 provisions, non-compliance leading to dismissal, and the possibility of seeking recourse through other legal avenues despite the dismissal of the petition.