2022 (8) TMI 326 - AT - Insolvency and Bankruptcy

Appellate Tribunal Overturns Authority's Decision on Insolvency Application

M/s Quippo Infrastructure Limited, (Formerly Known as Quippo Construction Equipment Limited) Versus M.R. Nirman Private Limited

M/s Quippo Infrastructure Limited, (Formerly Known as Quippo Construction Equipment Limited) Versus M.R. Nirman Private Limited - TMI Issues Involved:1. Rejection of application under Section 9 of the Insolvency and Bankruptcy Code, 2016 by the Adjudicating Authority.2. Service of Demand Notice under Section 8 on the Corporate Debtor.3. Requirement of a Banker's Certificate for triggering Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Code.Analysis:Issue 1: Rejection of Application under Section 9:The Appellate Tribunal considered an appeal against the rejection of an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 by the Adjudicating Authority. The Adjudicating Authority dismissed the application due to the operational creditor's failure to provide proof of delivery of the demand notice and absence of evidence regarding the receipt of money in May 2016. The Appellant contended that the demand notice was duly served on the Respondent and that proof of receipt of payment in May 2016 was provided. The Tribunal found that the demand notice was served as per requirements and the receipt of money was evidenced by bank statements. The Tribunal allowed the appeal, setting aside the Adjudicating Authority's order and remanding the matter back for further consideration on its merits.Issue 2: Service of Demand Notice under Section 8:The Tribunal examined whether the demand notice under Section 8 was duly served on the Corporate Debtor. It was established that the demand notice was sent by the Appellant to the Respondent and was duly served on the Corporate Debtor at the registered office address. The Tribunal noted that the address was undisputed, and the Section 9 application was also addressed to the same registered office. Therefore, the Tribunal concluded that the demand notice was properly served, meeting the requirements under Section 8 of the Code.Issue 3: Requirement of Banker's Certificate for CIRP under Section 9:Regarding the need for a Banker's Certificate for triggering the Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Code, the Tribunal referred to a Supreme Court case and emphasized that a Banker's Certificate is not mandatory to initiate CIRP. The Tribunal clarified that it did not delve into the debt or default aspects but focused on the service of the demand notice and the necessity of a Banker's Certificate for initiating CIRP under Section 9. The Tribunal allowed the appeal based on these findings and directed the Adjudicating Authority to decide the application on its merits.In conclusion, the Appellate Tribunal allowed the appeal, setting aside the Adjudicating Authority's order and remanding the matter for further consideration, emphasizing the proper service of the demand notice and clarifying the requirement of a Banker's Certificate for initiating the Corporate Insolvency Resolution Process under Section 9 of the Insolvency and Bankruptcy Code, 2016.