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2020 (1) TMI 472 - AT - Insolvency and BankruptcyService of notice - initiation of CIRP - Whether the demand notice issued U/S 8 of the I & B Code 2016, against the corporate debtor, for the dues of sister concern/group company, can be treated as a valid notice? - HELD THAT:- Admittedly invoices have been issued in the name of 'M/s Flywheel Logistics Pvt. Ltd.'. It is also on record that 'M/s Flywheel Logistics Pvt. Ltd.' and 'M/s Flywheel Logistics Solutions Pvt. Ltd' are different 'Corporate Entities', having deferent CIN Numbers and registered addresses - it is clear that the Respondent No 1 Applicant / 'Operational Creditor' has no right to claim dues, relating to the invoices issued against 'M/s Flywheel Logistics Pvt. Ltd.', from the corporate debtor M/s 'Flywheel Logistics Solutions Pvt. Ltd.' i.e. FLSPL, the Respondent No 2, which is a separate corporate entity, having different CIN Number. It is also on record that the mandatory primary requirement for filing petition U/S 9 of the 'Insolvency and Bankruptcy Code, 2016' is the service of the Demand Notice U/S 8 of the Code. The demand notice should have been served along with the copy/bill(s) / invoice(s) on the 'Corporate Debtor' - But in the present case, the Bill / Invoice was raised against, M/s Flywheel Logistics Private Limited, whereas the mandatory demand notice under Section 8 of the 'IBC' has been served against the 'Flywheel Logistics Solutions Pvt. Ltd.'. The demand notice issued against the 'Corporate Debtor' is not a valid notice U/S 8 of the Code. The alleged demand notice relates to the dues of the other Company, namely 'M/s Flywheel Logistics Private Limited'. For filing a petition under Section 9 of the Code, service of demand notice under Section 8 is mandatory requirement, and after that if a 'Corporate Debtor' fails to pay the dues within 10 days of service of demand notice with copy of the invoices, as mentioned in sub-Section 1, or bring to the notice of the 'Operational Creditor' existence of dispute, then right to file an application under Section 9 of the 'Insolvency and Bankruptcy Code, 2016' accrues. In this case demand notice in Form 3 and Form, 4 has been issued in the name of 'M/s Flywheel Logistics Solutions Pvt. Ltd.' - But the amount being claimed by the said demand notice is not relating to the 'Corporate Debtor' but relates to another company viz. 'M/s Flywheel Logistics Pvt. Ltd.' The service of demand notice cannot be treated as valid and proper service - impugned order regarding admission of the Company Petition filed under Section 9 of the 'Insolvency and Bankruptcy Code, 2016 is set aside - appeal allowed.
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