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2023 (7) TMI 265 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - service of demand notice or not - existence of debt and dispute or not. Demand Notice not served on the Corporate Debtor - HELD THAT:- When in the Section 9 Application, the Operational Creditor has filed the original postal receipt for dispatch of Notice and service of Notice from the website of Postal Department and there being no challenge to the service report downloaded from the website of the Postal Department, there is no infirmity in the finding of the Adjudicating Authority that Demand Notice was served. It is further relevant to notice that in the Settlement Agreement, which was entered between the Operational Creditor and the Corporate Debtor on 27.09.2021, the Settlement Agreement also referred to Demand Notice dated 15.10.2018 sent on 18.10.2018 - there are no merit in submission of the learned Counsel for the Appellant that Demand Notice was not served on the Corporate Debtor. The Operational Creditor is at liberty to submit Demand Notice either in Form-3 or Form-4. When Notice is issued in Form-4, copy of the Invoice is required to be attached with the Notice. The Demand Notice issued by the Operational Creditor was in Form-3, hence, no infirmity can be found in the Demand Notice, if invoices were not attached. In the Application, which was filed under Section 9 Demand Notice dated 15.10.2018 clearly mentions that debt of 92,70,000/- is due and payable on the basis of supply, installation, testing and commission Agreement dated 05.02.2013 - the basis of the Demand Notice was Supply Agreement and acknowledgement letter issued by the Corporate Debtor. No invoices were referred to in the Demand Notice. Hence, submission of the Appellant that Demand Notice should have been accompanied with the invoices cannot be accepted. The present is a case where the Demand Notice issued by the Operational Creditor on the basis of supply and installation Agreement and the acknowledgement letter issued by the Corporate Debtor. In the facts of the present case, Notice having not been issued in Form-4, cannot be faulted with. There can be no defect and infirmity in Demand Notice issued in Form-3 in the facts of the present case. Thus, the submission of learned Counsel for the Appellant that Demand Notice is defective, cannot be accepted. Whether the operational debt was due and not paid by the Corporate Debtor? - HELD THAT:- The Demand Notice was issued for an amount of Rs.92,70,000/- for which amount Section 9 Application was filed. The Corporate Debtor and Operational Creditor entered into a Settlement Agreement on 27.09.2021, which Agreement was also brought on the record. The Settlement Agreement between the parties acknowledged the liability of Corporate Debtor for an amount of Rs.92,70,000/- It is further relevant to notice that although Corporate Debtor agreed to pay sum of Rs.60,00,000/-, but an amount of only Rs.25 lakhs was paid and the second installment of Rs.20 lakhs to be paid on or before 15.12.2021 and third installment of Rs.15 lakhs on or before 15.03.2022 were not paid. Thus, there was clear default on the part of the Corporate Debtor of acknowledged debt and on the date when Section 9 Application was heard on 25.01.2023, the operational debt remained unpaid. The Adjudicating Authority after considering all materials on record returned a finding that Operational Creditor has proved the debt and default, which is more than Rs.1 lakh. Challenge in the present appeal is to the admission order passed by the Adjudicating Authority in Section 9 Application filed by the Operational Creditor. The Assignment Deed in favour of Respondent No.3 on 03.02.2023 was not the subject matter of any issue between the parties in Section 9 Application. On the basis of the Assignment, Respondent No.3 has only prayed to be impleaded in this Appeal to support the impugned order. Respondent No.3 was impleaded in this Appeal by order dated 20.03.2023 - the Assignment in favour of Respondent No.3 is not subject matter of any dispute in the present Appeal, except that Respondent No.3 has been impleaded to advance submission on behalf of it to support the impugned order - thus for the purpose of this case, various arguments made by the Appellant regarding Assignment dated 03.02.2023, needs no consideration. There are no grounds made out to interfere with the impugned order passed by the Adjudicating Authority admitting Section 9 Application. In result, the Appeal is dismissed.
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