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2018 (7) TMI 2317 - AT - Insolvency and BankruptcyApplication admitted u/s 9 of IBC - non-services of notices - it is alleged that notice under Section 8(1) of the I & B Code 2016 was never served on the Corporate Debtor - also alleged that Adjudicating Authority has not served any notice on the Corporate Debtor before admitting the application under Section 9 - HELD THAT:- The notice under Rule 5 (1) of the 'I & B Code' 2016 (Application to Adjudicating Authority) Rules 2016 i.e. Demand Notice under Section 8(1) was issued by the Operational Creditor on 29th August 2017. It was not served on the Corporate Debtor and returned with the note "insufficient address". The Adjudicating Authority at paragraph 4 of the impugned order though noticed that notice sent to the Corporate Debtor returned unserved with insufficient address, in spite of the same the application under Section 9 was entertained on the ground that the address of the Corporate Debtor as appearing on the website was mentioned by the Operational Creditor. The legislative intent of issuance of Demand Notice under Section 8(1) is not a mere formality but a mandatory provision. Only after service of notice under Section 8(1) and on completion of 10 days, if payment towards the demand is not made, an Operational Creditor accrues right to file application under Section 9 and not before such date - in absence of service of Demand Notice, the application under Section 9 of 'I & B Code' 2016 was not maintainable. This apart, it is found that the Adjudicating Authority had not issued any Notice on the Corporate Debtor before admission of the application under Section 9 which was required to be issued in the light of the decision of this Appellate Tribunal in Innoventive Industries Ltd. Vs. ICICI Bank and Ors. [2017 (6) TMI 959 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, MUMBAI] - the direction given to Operational Creditor to serve notice of date of hearing on the Corporate Debtor is not in accordance with the NCLT Rules, 2016 and cannot be treated to be a notice issued and served by the Adjudicating Authority. It is also against sub-Section (2) of Section 424 of the Companies Act, which is applicable to I & B Code 2016. The orders passed by the Adjudicating Authority appointing 'Resolution Professional', declaring moratorium, freezing of account, and all other order (s) passed by the Adjudicating Authority pursuant to impugned order and action taken by the 'Resolution Professional', including the advertisement published in the newspaper calling for applications all such orders and actions are declared illegal and are set aside - application dismissed.
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