Deemed service of demand notice and limitation under IBC supported admission of the section 9 insolvency application.

Deemed service of a section 8 demand notice was treated as sufficient where the notice was sent to the registered office and the director's residential address, the corporate debtor did not specifically deny receipt, and the postal record and reply supported service. On that basis, the section 9 proceeding could be maintained. The application was also held to be within limitation because the invoices were raised in March 2017, the last part-payment was made on 20 June 2017, and the application was filed on 15 September 2018, within the three-year period. The rejection of the insolvency application was therefore set aside and admission of the application was directed.

---

---

Issues: (i) Whether deemed service of the demand notice under section 8 of the Insolvency and Bankruptcy Code, 2016 was sufficient to trigger proceedings under section 9 of the Code; (ii) Whether the section 9 application was barred by limitation.

Issue (i): Whether deemed service of the demand notice under section 8 of the Insolvency and Bankruptcy Code, 2016 was sufficient to trigger proceedings under section 9 of the Code.

Analysis: The demand notice was sent to the registered office and to the director at the residential address. The record showed that the corporate debtor did not specifically deny service in its reply and, instead, referred to the notice and the reply allegedly given in response to it. The statutory scheme under sections 8 and 9 of the Insolvency and Bankruptcy Code, 2016, read with Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 and Rule 38 of the National Company Law Tribunal Rules, 2016, requires delivery of the demand notice, but the material placed before the Tribunal was sufficient to show service. The reply of the corporate debtor and the postal record supported the conclusion that notice had been served or deemed to have been served.

Conclusion: The issue was answered in favour of the appellant, and service of the demand notice was treated as established for the purpose of section 9.

Issue (ii): Whether the section 9 application was barred by limitation.

Analysis: The invoices were raised in March 2017, the last part-payment was made on 20 June 2017, and the application was filed on 15 September 2018. On those dates, the claim was within the prescribed three-year limitation period.

Conclusion: The section 9 application was held to be within limitation.

Final Conclusion: The rejection of the insolvency application was set aside and admission of the application was directed, as the requirements for proceeding under section 9 were held to be satisfied.

Ratio Decidendi: Where the record sufficiently establishes delivery or deemed delivery of the section 8 demand notice and the corporate debtor does not specifically deny service, the operational creditor may maintain a section 9 application if the other statutory requirements are met and the claim is within limitation.

---