2019 (6) TMI 76 - Tri - Insolvency and Bankruptcy

Service of demand notice clarified: registered or corporate office both valid. NCLAT ruling impacts compliance.

Counfreedise Versus Timex India Group Ltd.

The case focused on compliance with the service of demand notice under Section 8 of the Insolvency and Bankruptcy Code. The dispute centered on whether ... Service of demand notice u/s 8 of the Code - registered office OR corporate office - Section 8(1) of the Code and Rule 5 of the Insolvency and Bankruptcy (Application to the Adjudicating Authority) Rules, on conjoint reading makes it categorically clear that the service of demand notice is mandatorily to be served at the registered office of the corporate debtor - corporate debtor has received the demand notice sent under section 8 of the Code at the corporate office without any objection or opposition or any remark - HELD THAT:- Till the filing of the present application the respondent had never raised the objection to the receiving or replying to the said notice u/s 8 and at the stage of final hearing this issue raised by corporate debtor should not be considered and the matter be heard on merit - Thus, preliminary objection not being raised at the initial stage, cannot be tenable at this stage specially after completion of the pleadings. In view of the present latest judgment of the Hon'ble NCLAT in NCLAT in ALLOYSMIN INDUSTRIES VERSUS RAMAN CASTING PRIVATE LIMITED, DELHI [2019 (3) TMI 194 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] which is binding on NCLT, it leaves no doubt that demand notice under section 8 of the Code can be served at registered office/corporate office. Application dismissed. Issues:- Compliance with service of demand notice under Section 8 of the Insolvency and Bankruptcy Code, 2016.- Interpretation of the mandatory requirement of serving the demand notice at the registered office of the corporate debtor.- Relevance and binding nature of judgments from the Hon'ble Madras High Court and NCLAT.- Consideration of preliminary objections raised at different stages of the proceedings.- Impact of recent NCLAT judgment on the validity of serving demand notices at the registered office or corporate office.Compliance with service of demand notice under Section 8:The main contention in this case revolves around the mandatory requirement for operational creditors to serve a demand notice under Section 8 of the Insolvency and Bankruptcy Code at the registered office of the corporate debtor. The applicant argues that failure to serve the notice at the registered office, as per the Master Data of the MCA, renders the application invalid. The applicant relies on a judgment from the Hon'ble Madras High Court emphasizing the mandatory nature of serving the notice at the registered office.Interpretation of mandatory service requirement:The applicant contends that the service of demand notice under Section 8 must be strictly at the registered office of the corporate debtor, as prescribed by law. The argument is supported by legal principles that dictate adherence to statutory provisions in a specific manner. The applicant cites various judgments to reinforce the importance of following statutory requirements as laid down by the law.Relevance of previous judgments:The applicant relies on judgments from the Hon'ble Madras High Court and the NCLAT, highlighting the binding nature of these decisions. The judgments underscore the significance of serving demand notices at the registered office and provide a legal basis for dismissing applications that do not comply with this requirement.Consideration of preliminary objections:The respondent argues that the corporate debtor received the demand notice at the corporate office without objection and responded to it, raising a dispute. The respondent contends that objections to the notice should have been raised earlier in the proceedings and cannot be considered at a later stage. Reference is made to an NCLAT order emphasizing that serving the demand notice at either the registered office or corporate office is deemed valid.Impact of recent NCLAT judgment:The Tribunal takes into account a recent judgment from the NCLAT, which clarifies that serving the demand notice under Section 8 at either the registered office or corporate office is acceptable. This judgment, considered binding on the Tribunal, influences the decision to dismiss the application. The dismissal is a consequence of the Tribunal's interpretation of the NCLAT judgment and its impact on the validity of serving demand notices at different office locations.