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2022 (8) TMI 420
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.... dated 24.06.2019 and second one dated 20.07.2019. Demand notice which is a pre- requisite under Section 8 of the Insolvency & Bankruptcy Code, 2016 for filing the petition under Section 9, is signed and issued by an advocate on behalf of M/s. Nehru & Co. (Advocates and Legal Consultants), whereas, the petition is signed by Mr. Rohit Agarwal, Partner of the applicant frim on the basis of authority letter dated 20.08.2019 issued by the other partner of the partnership firm. On perusal of the records it is found that no authority is given to the advocate to issue demand notice or for filing an application u/s 9 of the IB Code. Similarly, no document is produced by the applicant showing that the advocate who has signed the application is associated with the company for a long period and can take such steps on behalf of the company. Therefore, the demand notice which is a pre-requisite for filing an application under Section 9 of the itself is bad in the eye of law. 10. On perusal of the records it is found that the Respondent Company is a going concern and at present giving employment to 20 employees. Hence, it would defeat the very purpose of the Code, if a going concern gen....
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....sly observed that the Corporate Debtor is an MSME and a going concern having twenty employees and that initiating CIRP proceedings would defeat the purpose of the Code. This cannot be a ground for dismissal of the Application under Section 9 of the Code. It is argued that a perusal of the Section 20 of the Code would make it amply clear that the objective of the Code is not to put the Operational Creditor through rigours of the CIRP Process, but to instead maximize the value of assets of such persons, to promote entrepreneurship and balance the interest of all stakeholders. * Ld. Counsel further contended that the Adjudicating Authority has failed to appreciate the evidence of acknowledgment in the Ledger Statement and ought to have given a reasonable opportunity to the Appellant to file other documents. The Corporate Debtor did not raise any dispute regarding the products supplied or the invoices raised by the Appellant either before issuing the demand notice, or after receiving the same. In fact, the Respondent has also made part payments towards the invoices raised by the Appellant. It is strenuously argued that a copy of the certificate from the 'financial institutions' main....
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.... of 2021, dated 23.07.2021. * Pankaj Aggarwal vs. Union of India & Ors. , W.P. (C) 3685 of 2020 & CM Appls. 13194/2020,13195/2020,13196/2020. Assessment: 6. The brief point for consideration which arises in this Appeal is whether the Adjudicating Authority was justified in rejecting the Section 9 Application preferred by the Appellant herein. 7. It is the main case of the Appellant/Operational Creditor that the Adjudicating Authority has wrongly observed that the demand notice under Section 8 of the Code was issued by an advocate and is therefore not valid. 8. The Adjudicating Authority in para 9 of the impugned order has observed that the demand notice which is a prerequisite for filing of the Application under Section 9 is bad as no document was produced by the Applicant/Appellant showing that the advocate who has signed the Application is associated with the Company for a long period and can take such steps on behalf of the Company. 9. We are of the considered view that as far as this issued is concerned, an advocate can, on behalf of the Company issue a demand notice under Section 8 and no such document is required to establish his 'period of association....
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....f this requirement, the Appellant ought to have filed the relevant Purchase Orders based on which its claim was raised. Part-V, Column 7 of form 5 also mandates that a statement of the bank account where deposit or credit is received, ought to be attached. 13. It is relevant at this juncture, we reproduce the relevant provisions of the Code along with the concerned Regulations which establish that the Application should be complete and only then the Adjudicating Authority may decide to admit the Application. Sec 9. Application for initiation of corporate insolvency resolution process by operational creditor.- (1) After the expiry of the period of ten days from the date of delivery of the notice or invoice demanding payment under sub-section (1) of Section 8, if the operational creditor does not receive payment from the corporate debtor or notice of the dispute under sub-section (2) of Section 8, the operational creditor may file an application before the adjudicating authority for initiating a corporate insolvency resolution process. (2) The application under sub-section (1) shall be filed in such form and manner and accompanied with such fee as may be....
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.... to the applicant to rectify the defect in his application within three days of the date of receipt of such notice from the adjudicating authority. (6) The corporate insolvency resolution process shall commence from the date of admission of the application under sub-section (5)." Regulation 7 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 is also relevant and reads as under: ― 7. Claims by operational creditors.- (1) A person claiming to be an operational creditor, other than workman or employee of the corporate debtor, shall submit proof of claim to the interim resolution professional in person, by post or by electronic means in Form B of the Schedule: Provided that such person may submit supplementary documents or clarifications in support of the claim before the constitution of the committee. (2) The existence of debt due to the operational creditor under this Regulation may be proved on the basis of- (a) the records available with an information utility, if any; or (b) other relevant documents, including- (i) a contract for the s....
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.... List of documents attached to this proof of claim in order to prove the existence and non-payment of claim due to the operational creditor. Signature of operational creditor or person authorised to act on his behalf [Please enclose the authority if this is being submitted on behalf of an operational creditor] Name in BLOCK LETTERS Position with or in relation to creditor Address of person signing" Section 8(1), the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, speaks of demand notices by the operational creditor and applications by the operational creditor in the following terms: ― 5. Demand notice by operational creditor.-(1) An operational creditor shall deliver to the corporate debtor, the following documents, namely- (a) a demand notice in Form 3; or (b) a copy of an invoice attached with a notice in Form 4. (2) The demand notice or the copy of the invoice demanding payment referred to in sub-section (2) of Section 8 of the Code, may be delivered to the corporate debtor, (a) at the registered office by hand, registered post or speed post wit....
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....es (if the corporate debtor is a company) 4. Details of retention of title arrangements (if any) in respect of goods to which the operational debt refers 5. Record of default with the information utility (if any) 6. Provision of law, contract or other document under which debt has become due 7. List of documents attached to this application in order to prove the existence of operational debt and the amount in default 3. If you dispute the existence or amount of unpaid operational debt (in default) please provide the undersigned, within ten days of the receipt of this letter, of the pendency of the suit or arbitration proceedings in relation to such dispute filed before the receipt of this letter/notice. 4. If you believe that the debt has been repaid before the receipt of this letter, please demonstrate such repayment by sending to us, within ten days of receipt of this letter, the following: (a) an attested copy of the record of electronic transfer of the unpaid amount from the bank account of the corporate debtor; or (b) an attested copy of any record that [name of the operational creditor] has received the p....
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....LUTION PROCESS UNDER THE CODE. [Under Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016] [Date] To, The National Company Law Tribunal [Address] From, [Name and address for correspondence of the operational creditor] In the matter of [name of the corporate debtor] Subject.-Application to initiate corporate insolvency resolution process in respect of [name of the corporate debtor] under the Insolvency and Bankruptcy Code, 2016. Madam/Sir, [Name of the operational creditor], hereby submits this application to initiate a corporate insolvency resolution process in the case of [name of corporate debtor]. The details for the purpose of this application are set out below: Part I PARTICULARS OF APPLICANT 1. Name of operational creditor 2. Identification number of operational creditor (if any) 3. Address for correspondence of the operational creditor Part II PARTICULARS OF CORPORATE DEBTOR 1. Name of the corporate debtor 2. Identification number of corporate debtor 3. Date ....
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.... order to prove the existence of operational debt and the amount in default I, [Name of the operational creditor/person authorised to act on behalf of the operational creditor] hereby certify that, to the best of my knowledge, [name of proposed insolvency professional], is fully qualified and permitted to act as an insolvency professional in accordance with the Code and the rules and regulations made thereunder. [WHERE APPLICABLE] [Name of the operational creditor] has paid the requisite fee for this application through [state means of payment] on [date]. Yours sincerely, Signature of person authorised to act on behalf of the operational creditor Name in block letters Position with or in relation to the operational creditor Address of person signing Instructions Please attach the following to this application- Annex I Copy of the invoice/demand notice as in Form 3 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 served on the corporate debtor. Annex II Copies of all documents referred to in this application. Annex III ....