NCLT Dismisses Petition For Non-Compliance With Mandatory Requirement Of Service Of Demand Notice

NCLT Dismisses Petition For Non-Compliance With Mandatory Requirement Of Service Of Demand Notice

Introduction

The National Company Law Tribunal has considered a petition filed by M/s. Anurada Chemicals, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against M/s. Synaptics Labs Private Limited for alleged default in payment of operational debt amounting to Rs.1,25,12,394/-.

Factual Background

The Operational Creditor (OC) supplied chemicals to the Corporate Debtor (CD), which failed to make payments. The CD handed over two post-dated cheques that were dishonoured upon presentation. The OC sent a Confirmation of Accounts and a demand notice, which was not replied to by the CD.

Procedural Background

The Tribunal considered the petition filed by the OC and the evidence placed on record. The CD was proceeded ex-parte, and the Tribunal heard the Learned Counsel for the Petitioner.

Issues Involved

1. Existence of Operational Debt: The National Company Law Tribunal has considered a petition filed by M/s. Anurada Chemicals, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against M/s. Synaptics Labs Private Limited for alleged default in payment of operational debt amounting to Rs.1,25,12,394/-.

2. Service of Demand Notice: Whether the OC has complied with the mandatory requirement of serving a demand notice under Section 8(1) of the IBC.

Contentions of the Parties

• Operational Creditor's Contentions: The OC argued that the CD had failed to make payments despite repeated requests and that the demand notice had been served.
• Tribunal's Observations: The Tribunal observed that the OC had not served the demand notice at the correct registered address of the CD and that there was no proof of valid service.

Reasoning and Analysis

The Tribunal analyzed the evidence placed on record and held that:

Operational Debt Established: The OC has established the existence of an operational debt and default exceeding the threshold limit prescribed under the Code.

Non-Compliance with Section 8: However, the OC has not complied with the mandatory requirement of valid service of the demand notice under Section 8(1) of the IBC.

Final Decision

The coram of Justice Rajeev Bhardwaj and Technical Member Sanjay Puri dismissed the petition, holding that while the OC has established the existence of an operational debt and default, the mandatory requirement of valid service of the demand notice has not been complied with.

Implications

This decision shows the importance of strict compliance with the procedural requirements of the IBC, particularly with regard to service of demand notices. It emphasizes that failure to comply with these requirements can result in dismissal of the petition.