TMI Blog2019 (10) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... : Mr. Rajeshwar Kumar Gupta, Advocate ORDER 1. That, the instant application is filed by Mr. Harshad V. Vora, Proprietor of the applicant company (operational creditor) namely M/s. Utkarsh Steel Corporation, under Section 9 of the Insolvency and Bankruptcy Code, 2016 [hereinafter referred to as the Code ]. 2. That, the applicant/operational creditor M/s. Utkarsh Steel Corporation is a proprietorship firm having its registered office at 40, Carnac Siding Road, Iron Market, Steelyard Building Gate, Mumbai 400 009 is engaged in the business of iron sheets etc. 3. That, M/s. Bhagwan Motors Private Limited is a company incorporated under the Companies Act, 1956 on 28th July, 2004 and having its registered office at Industrial Area, Pithampur, Dhar, Madhya Pradesh 454 775 having identification No. U51109MP2004PTC016796. That, authorised share capital of the corporate debtor is ₹ 25,00,000/- and paid-up share capital is ₹ 25,00,000/-. 4. It is submitted by the applicant that he had filed application under Section 9 of the IB Code before this Adjudicating Authority, being , Being Company Petition No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticulars Page Nos. 01 Affidavit in support of application 13-17 02 Signed mandate/consent of IRP in form 2 dated 17.02.2018 18-19 03 Consent of IRP in form No. 2 18-19 04 Copy of invoices/demand notices in form - 3 dated 30.10.2017 with copy of service by an e-mail dated 02.11.2017 20-28 05 Copy of invoices/demand notices in form 4 dated 10.11.2017 with copy of service by e-mail sent on 13.11.2017 29-35 06 Email dated 11.11.2017 received from corporate debtor with illegible annexures 36-47 07 Registration certificate dated 28.07.2004 of corporate debtor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e under sub-section (1) of Section 8 was not issued by the operational creditor but through its lawyer/advocate and secondly no notice of hearing was issued by the Registry/Adjudicating Authority. For the sake of brevity, relevant portion of the order of Hon ble NCLAT is reproduced hereunder: - 2. Learned counsel appearing on behalf of the appellant corporate debtor submits that the impugned order dated 6th June, 2017 has been passed by the Adjudicating Authority is in violation of rules of natural justice as no notice was served on the appellant. It is further submitted that notice under sub-section (1) of Section 8 was not issued by the operational creditor but through its lawyer/advocate 4. In M/s. Innoventive Industries Ltd. v. ICCI Bank in Company Appeal (AT) (Insolvency) Nos. 1 2 of 2017, the Appellate Tribunal held that it is the duty of the Adjudicating Authority to issue notice and not the party. In this case, Adjudicating Authority directed the contesting party to issue notice, which is not in accordance with the law. This apart, in absence of any service of such notice, it was not open to the adjudicating Authority to admit the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 8 was not issued by the operational creditor but through the lawyer. The Hon ble NCLAT while deciding the appeal categorically observed that the case is covered by the decision in Uttam Galva Steels Ltd. (supra), in Para No.32, it is held as follows; 32. In view of provisions of I B Code, read with Rules, as referred to above, we hold that an Advocate/Lawyer or Chartered Accountant or Company Secretary in absence of any authority or the Board of Directors, and holding no position with or in relation to the Operational Creditor cannot issue any notice under Section 8 of the I B Code, which otherwise is a lawyer s notice as distinct from notice to be given by operational creditor in terms of section 8 of the I B Code. 12. Thus on perusal of order so passed by the Hon ble NCLAT, it nowhere discloses that the case/matter is decided on merit. The only issue was/were with regard to the issuance of notice to corporate debtor under Section 8 by the advocate and issue of notice by the Adjudicating Authority informing the date of hearing. At this stage it is desirable to mention here that in a recent judgment delivered on 15th December, 2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion by the parties differs and the threshold is that the amount is above rupees one lakh. At this stage it is appropriate to refer to the decision taken in Innoventive Industries Ltd. v. ICICI Bank 143 SCL 625 (SC) wherein the Hon ble Supreme Court observed and held as follows: - 27. The scheme of the Code is to ensure that when a default takes place, in the sense that a debt becomes due and is not paid, the insolvency resolution process begins. Default is defined in Section 3 (12) in very wide terms as meaning non-payment of a debt once it becomes due and payable, which includes non-payment of even part thereof or an instalment amount. For the meaning of debt , we have to go back to section 3 (11), which in turn tells us that a debt means a liability of obligation in respect of a claim and for the meaning of claim , we have to go back to section 3 (6) which defines claim to mean a right to payment even if it is disputed. The Code gets triggered the moment default is of rupees one lakh or more (Section 4). The Corporate Insolvency resolution process maybe triggered by the corporate debtor itself or a financial creditor or operational creditor. A distinction is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd respondent advanced his arguments on 20.03.2019. 21. A perusal of the petition and the invoices attached to the petition clearly goes on to show that the petitioner supplied goods to the respondent as per the invoices. That, the petitioner has also filed copy of bank statement to show that the amount in invoices are not paid by the corporate debtors. That, Petitioner has also filed registration certificate of the respondent company. From the aforesaid material it is clear that the petitioner is operational creditor and the respondent is corporate debtor. The material on record further clearly show that the amount covered by invoices are due to the operational creditor. That the 1st invoice is dated 20.03.2014 and the last is dated 19.05.2016. From the aforesaid material on record, petitioner is able to establish that there exists debt as well as occurrence of default and it is not barred by limitation. 22. As can be seen from the confirmation of accounts from 01.04.2016 to 31.03.2017 an amount of ₹ 41,84,270/- is outstanding against respondent. Petitioner stated that no notice of dispute has been given by respondent. From the aforesaid materia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of this Petition and appointment of the Interim Resolution Professional, this Adjudicating Authority hereby pass the order declaring moratorium under Section 13(l)(a) prohibiting the following as laid down in Section 14 of the Code; (i) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; (ii) transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein; (iii) any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002); (iv) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor. (a) However, the supply of goods and essential services to the corporate debtor shall ..... X X X X Extracts X X X X X X X X Extracts X X X X
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