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Calcutta Ispal Pvt. Ltd. Versus M/s Om Shakti Smelters Pvt. Ltd.

2017 (9) TMI 856 - NATIONAL COMPANY LAW TRIBUNAL, KOLKATA

Corporate insolvency resolution process - non-compliance of requisite statutory requirement given in Secs.8 and 9 of the I & B Code - operational creditor has not issued demand notice prescribed - Held that:- In this case it is undisputed, that before filing an application in Form 5 under the I & B Code operational creditor has not issued demand notice prescribed in form and operational creditor has also not annexed affidavit relating to the fact that there is no notice given by the corporate de .....

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f the I & B Code. - In Sec. 5 condition has been prescribed for admitting the petition which clearly specifies that if the application made under sub-sec. (2) is complete and there is no repayment of unpaid operational debt and invoice or notice was made to the corporate debtor has been delivered by the operational creditor and no notice of dispute has been received by the operational creditor or there is no record of dispute in the information utility and there is no disciplinary proceeding .....

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av Mondal, Advs. ORDER The Applicant Calcutta Ispat Pvt. Ltd. has filed this application under Sec.9 of Insolvency and Bankruptcy Code, 2016 read with Rule 6 of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016 for initiation of corporate insolvency resolution process against the corporate debtor, M/s. Om Shakti Smelters Pvt. Ltd. 2. The brief facts of the case, as given in Part IV in Form 5, are that a sum of ₹ 57,00,000/- along with interest @ 18% calcul .....

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uly credited by the operational creditor on 16/10/2014. But, the corporate debtor defaulted in supply the ordered goods which it was entitled from 31/12/2014 i.e. within 70 days from the date of 80% of the advance payment. But the corporate debtor failed to supply the ordered goods not only in the stipulated period of 70 days, but it failed to supply the ordered goods throughout the year 2015. The operational creditor verbally cancelled the said purchase order dated 24/7/2014 and asked for refun .....

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rwal, as Director of the corporate debtor, Calcutta Ispat Pvt. Ltd. 5. In reply to the application filed by the operational creditor, the corporate debtor has filed an affidavit wherein it has been stated that no notice in Form 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (hereinafter referred to as the Adjudicating Authority Rules, 2016), has been issued upon the corporate debtor and hence, the application purportedly filed under Rule 6 of the Adjudicat .....

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he reply that requirement of Sec.8 of the I & B Code, 2016 read with Rule 6 of the Adjudicating Authority Rules, 2016 have not been complied with regard to purported claim. It is also alleged that purported claim of the operational creditor is highly disputed and is based on forged and fabricated documents. No sum is due and payable by the corporate debtor to the operational creditor. Corporate debtor has denied and disputed each and every allegations contained in Form 5. It has also been de .....

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lakh is payable by the corporate debtor to the operational creditor either with or without interest as alleged or at all. It is also denied and disputed that corporate debtor has defaulted in supplying the ordered goods as alleged or at all. It is further alleged that supply has been completed by the corporate debtor and no further supply is outstanding and, therefore, the question of operational creditor claiming any sum from the corporate debtor does not and cannot arise. It is also denied th .....

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legation contained in purported notice under Form 3 dated 30/3/2017. It is further alleged that the operational creditor has approached this Tribunal by gross suppression of material facts and on this ground alone the company petition is liable to be dismissed. The said application is misconceived and without any merit and is not in accordance with I & B Code, 2016 and the applicable Rules framed thereunder. 10. The operational creditor has also filed rejoinder wherein he has reiterated the .....

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. Demand notice along with the application in Form 5 has been filed together on 30/3/2017. This clearly shows that prior notice in Form 3 or 4 was not sent to the corporate debtor before filing of the petition under I & B Code. 14. In Form 5 it is stated that the applicant has to attach copy of invoice/demand notice as in Form 3 or Form 4 served on the corporate debtor; copies of all documents referred in the application; affidavit in support of application and copies of bank accounts of the .....

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ndisputed that the petition under I & B Code was filed without issuing demand notice and application in Form 5 along with demand notice has been filed altogether on the same day i.e. 30/3/2017. Sec.8 of the I & B Code lays down the procedure to be adopted for proceeding in Sec.9 of the I & B Code. 17. Thus it is clear that initiating corporate insolvency process by an operational creditor under Sec.9 of the I & B Code demand notice as is prescribed in form 3 or 4 is to given on t .....

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is important to mention that in company appeal (AT [Insolvency] 39/2017) Hon'ble NCLAT has laid down the law specifically relating to the mandatory compliance of statutory provision of Sec.8 and Sec.9 of the I & B Code, 2016. 18. Hon'ble NCLAT Company Appeal (AT) (Insolvency) 39 of 2017 Decided on: 28.07.2017 Appellants: Uttam Galva Steels Limited vs. Respondent : DF Deutsche Forfait and Ors.has held that: Under sub-section (1) of Section 8 of the I & B Code, an 'Operational .....

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the delivery of Demand Notice or copy of invoice, as the case may be. If the Operational Creditor does not receive payment from the Corporate Debtor or notice of dispute under Sub-section (2) of Section 8, the Operational Creditor only thereafter may file an application before the Adjudicating Authority for the initiation of corporate insolvency resolution process. An application under Section 9 of I & B Code is required to be filed in such format and manner and accompanied by such fee, as m .....

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dispute of the unpaid operational debt; (c) a copy of the certificate from the financial institutions maintaining accounts of the operational creditor confirming that there is no payment of an unpaid operational debt by the corporate debtor;- The provisions of sub-section (3) mandates the operational creditor to furnish copy of invoice demanding payment or demand notice delivered by the operational creditor to the corporate debtor, an affidavit to the effect that, 9 there is no notice given by .....

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of I & B Code is mandatory, including clause 3 therein. 19. Thus it is clear that word shall use in sub-section (3) of Sec.9 of I & B Code including clause 3 therein is to be mandatorily complied. Sub-section (3) of Sec.9 provides that the corporate debtor shall along with the application furnish a copy of invoice demanding payment or demand notice delivered by the operational creditor to the corporate debtor and affidavit to the effect that there is no notice given by the corporate debt .....

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