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2019 (10) TMI 1354 - NATIONAL COMPANY LAW TRIBUNAL , ALLAHABAD BENCHMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditor - validity of demand notice sent by the Operational Creditor - HELD THAT:- It is a settled principle of law that there is a difference between the procedure for initiation of CIRP by the Financial Creditors U/s 7 of the IBC and the Operational Creditors U/s 9 of the IBC. So far as the Financial Creditor is concerned, as per Section 7 of the IBC, there is no need to deliver the notice before the initiation of CIRP. For the initiation of CIRP U/s 9 of the IBC by the Operational Creditor, the Operational Creditor is required to deliver the demand notice upon the Corporate Debtor U/s 8 of the IBC. The main object of the inception of provision of Section 8 is, "This ensures that operational creditors, whose debt claims are usually smaller, are not able to put the corporate debtor into the insolvency resolution process prematurely or initiate the process for extraneous considerations. It may also facilitate informal negotiations between such creditors and the corporate debtor, which may result in a restructuring of the debt outside the formal proceedings", and that is the reason in Section 8 of the IBC, the word, 'deliver a demand notice of unpaid operational creditor' is mentioned instead of 'sending a demand notice of unpaid operational creditor'. The purpose to deliver the notice is to give an opportunity to the Corporate Debtor to raise a dispute or negotiate with the operational creditor and that was the intention of the legislatures, that is the reason the word 'delivery' has been given in place of 'sending or giving the notice upon the person concern'. This Tribunal is of the considered view that under Rule 5 of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016, there are two modes for sending demand notice, one is, either at the registered office by hand, registered post or speed post with acknowledgement due, or second one, by electronic mail service to a whole time director or designated partner or key managerial personnel, if any, of the corporate debtor, and on the basis of the facts stated in the application, it is found that, the applicant had sent the demand notice through the registered post, which was returned as "insufficient address" and through email of the Company as given in MCA portal but he has neither delivered it personally nor send the demand notice through electronic mail service to a whole time director or designated partner or key managerial personnel of the corporate debtor. The applicant has not complied the provision contained under Rule 5 of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016, therefore, this Tribunal is of the considered view that the applicant has not delivered the demand notice as required U/s 8 of the IBC, which is the mandatory provision of law and so on this ground in the absence of delivery of demand notice as required U/s 8 of IBC, the present petition filed by the applicant/operational creditor is not complete and not maintainable and liable to be dismissed. Petition dismissed.
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