Valid service at business addresses and failure to prove debt and default defeated the section 9 insolvency application.
Service of a section 8 demand notice under the Insolvency and Bankruptcy Code was treated as valid when delivered at the corporate debtor's corporate office and other regular business addresses, even though it was not sent to the registered office. However, an application under section 9 could not be admitted because the operational creditor did not establish the outstanding debt and default on the record; the corporate debtor disputed the amounts and asserted excess payment and full and final settlement, and those assertions were not specifically rebutted. The application was therefore dismissed for want of proof of debt and default.
Issues: (i) Whether the demand notice under section 8 of the Insolvency and Bankruptcy Code, 2016 was validly served on the corporate debtor when delivered at its corporate office and other business addresses but not at the registered office; (ii) Whether the operational creditor proved the debt and default necessary for admission of the application under section 9 of the Insolvency and Bankruptcy Code, 2016.
Issue (i): Whether the demand notice under section 8 of the Insolvency and Bankruptcy Code, 2016 was validly served on the corporate debtor when delivered at its corporate office and other business addresses but not at the registered office.
Analysis: Service at the corporate office and other addresses where the corporate debtor regularly carries on operations was treated as sufficient service. Non-delivery at the registered office did not negate valid service when actual delivery at the operational addresses was established.
Conclusion: The notice was held to be validly served, in favour of the petitioner.
Issue (ii): Whether the operational creditor proved the debt and default necessary for admission of the application under section 9 of the Insolvency and Bankruptcy Code, 2016.
Analysis: The corporate debtor disputed the claimed outstanding amounts, asserted excess payment for one season and full and final settlement for another, and the operational creditor did not file a rejoinder or otherwise specifically rebut those assertions. In the absence of such denial and proof, the claimed debt and liability were not established.
Conclusion: The operational creditor failed to prove the debt and liability, in favour of the corporate debtor.
Final Conclusion: The application under section 9 was not admitted and was dismissed for want of proof of debt and default.
Ratio Decidendi: Valid service of a statutory demand notice may be effected at the corporate debtor's corporate or operational addresses, and an application under section 9 cannot succeed unless the operational creditor proves the outstanding debt and default on the record.
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