Jitendra Kumar Singh vs. Vishakarma Tool Works & Anr.

 

Jitendra Kumar Singh vs. Vishakarma Tool Works & Anr.

Company Appeal (AT) (Insolvency) No. 437 of 2022

Date: 25-July-22

 

 

FACTS:

The operational creditors filed an application under section 9 of the code initiated CIRP against the corporate debtor for non-payment of the outstanding dues of Rs. 30,31,780/- arising out of the sale of the pet moulds, injection moulds, and various other plant and machinery of various description to the Corporate Debtor.

The operational creditor has alleged that before filing the application under section 9 of the IBC, the mandatory notice provided in section 8 of the code was sent on the 12^th of September 2019 calling upon the Corporate Debtor and its directors to pay the outstanding amount of Rs. 3031789/- and after waiting sufficiently for the positive reaction of the Corporate Debtor, application under section 9 was filed as a last resort.

The Corporate Debtor appears to have not raised any issue before the Tribunal regarding the Non-Compliance of the mandatory provisions of section 8 in regard to the service of the notice upon the Corporate Debtor as its registered offices.

In the present Appeal, filed by one of the suspended directors of the corporate debtor, it has been argued that proceedings initiated under section 9 are per ser illegal because mandatory notices, provided under section 8 of the code were not served upon the corporate debtor at its registered office address.

ISSUE FOR CONSIDERATION:

1.   Interpretation of word ‘OR’ in Rule 5(2) (a) & (b) in the context of Demand Notice.

2.   Reliance of Case on WhatsApp messages without there being any corroborative piece of evidence.

RATIO & DECISION TAKEN BY TRIBUNAL:

Tribunal referred to the decisions of the Hon'ble Supreme Court in the case of Mahabir Cold Storage Vs. CIT 1991 Supp. (1) SCC 402, A.V. Murthy Vs. B.S. Nagabasavanna (2002) 2 SCC 645 and Asset Reconstruction Company (India) Ltd. Vs. Bishal Jaiswal and Another (2021) 6 SCC 366, that

“The legislature has used the word “or” in Rule 5(2) (a) & (b) which means that the demand notice could be served either at the registered office or upon the Whole Time Director. It means that service upon one of the entities is sufficient compliance with Section 8(2) of the Code and both are not necessary.”

While answering Issue No 2 the NCLAT observe that “There is no quarrel with the law laid down by this Tribunal that electronic evidence i.e. email or even WhatsApp can also be looked into in order to find out the fact about an existing dispute between the parties which can be used as a shield by the corporate debtor to avoid the attack of the operational creditor with the filing of an application under Section 9 of the Code”

Click  here  to read/download the reportable copy of the Order.