TMI Blog2022 (1) TMI 1329X X X X Extracts X X X X X X X X Extracts X X X X ..... dures and met the threshold limit? - HELD THAT:- From the record available, it is noticed that the Demand Notice dated 18.07.2020 was sent to the registered office of the Appellant with claim for unpaid Operational Debt of principal amount of Rs. 1,44,63,630/- along with interest from 16.011.2018 to 14.08.2019 of Rs. 26,03,453/- thus, total amount claimed of Rs. 1,70,67,083/-. The date of default was mentioned as 16.11.2018. The Demand Notice also attached various documents including purchase order placed by the Corporate Debtor, invoice raised by the 2nd Respondent/ Operational Creditors, proof of part payment, communication between the parties and the working for computation of the default amount. The Demand Notice was clearly delivered as evident from document of Blue Dart. Section 8(2) of the I B Code, 2016 stipulate that the Corporate Debtor shall within a period of 10 days on receipt of the Demand Notice bring to the notice of the Operational Creditor existence of dispute or proof of payment made by sending attested copy of record of electronic transfer of unpaid amount or sending an attested copy of record that Operational Creditor has encashed a cheque issued by the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Petition filed under the Insolvency Bankruptcy Code, 2016 (in short I B Code, 2016). Brief Facts: 2. Mr. G. Ramakrishna Reddy, Suspended Managing Director of the Corporate Debtor Nexus Feeds Limited is the Appellant herein. Manjeet Bucha, IRP of Nexus Feeds Ltd. is the 1st Respondent. Hemamalini Traders, is the 2nd Respondent is a Operational Creditor of the Corporate Debtor . 3. The Corporate Debtor is engaged in the business of manufacturing and marketing premium quality fish feed who has engaged number of fish feed suppliers and vendors for supply of distiller s dried grain with soluble (DDGS), a form of fish feed. 4. The 2nd Respondent is a proprietor firm engaged in the business of supplying and trading of DDGS and other feed material. The 2nd Respondent has entered into business relationship with the Corporate Debtor for supply of DDGS , soya doc, mustard doc and feed supplement since 2016 onward and have been regular supplier. The 2nd Respondent on the aggregate basis of the total invoices raised has supplied for Rs. 8,81,50,278/- out of which there were some credit notes for an amount of Rs. 35,16,195/-. The Corporate Debtor used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant mentioned that he was shocked to know that the Adjudicating Authority has ordered to proceed ex-parte against the Corporate Debtor and listed the matter for further consideration of the Adjudicating Authority on 22.07.2021. 10. The Learned Counsel for the Appellant also stated that there were pre-existing disputes and ignoring all these facts, the Adjudicating Authority erred in giving ex-parte impugned order dated 04.08.2021 in gross violation of principals of natural justice and audi alterum partum. The Adjudicating Authority also failed to consider the prevailing covid situations. The Learned Counsel for the Appellant further stated that aggrieved by this ex-parte order, the Appellant/ the Corporate Debtor moved an application before the Adjudicating Authority for setting aside the ex-parte order which came for hearing on 13.08.2021. However, the Adjudicating Authority did not consider the same. The Learned Counsel for the Appellant stated that reason for non appearance before the Adjudicating Authority were mentioned in I.A. No. 424 of 2021 filed seeking setting aside of the ex-parte order before the Adjudicating Authority . The Learned Counsel f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Section 9 application. 16. The Learned Counsel for the 2nd Respondent emphasised that the Corporate Debtor failed to make outstanding payment of principle amount of Rs. 1,44,63,630/- plus interest @ 24% p.a. 17. The Learned Counsel for the 2nd Respondent stated that the he did not receive any legal notice of the civil suit dated 25.09.2018 and no clean/legible copy of the said notice along with proof of service was served on the 2nd Respondent and he is trying to mislead the Tribunal . The Learned Counsel for the 2nd Respondent further stated that similarly the 2nd Respondent was kept in dark regarding baseless civil suit before Civil Judge Bhimavaram, Andhra Pradesh and was made aware much later after initiation of proceeding under Section 9 application. The Learned Counsel for the 2nd Respondent vehemently opposed plea of so-called pre-existing dispute which are not genuine and merely illusionary and cannot be consider in view of the ratio of decision of Apex Court held in Mobilox Innovations Pvt. Ltd. Vs. Kirusa Software Pvt. Ltd. 18. The Learned Counsel for the 2nd Respondent stated that Demand Notice dated 18.07.2020 was delivered as evidence by receipt of Blu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded in NCLT Rules , 2016. 38. Service of Notices and processes.- (1) Any notice or process to be issued by the Tribunal may be served by post or at the e-mail address as provided in the petition or application or in the reply; (2) The notice or process if to be served physically may be served in any one of the following modes as may be directed by the Tribunal; - (a) by hand delivery through a process server or respective by authorised representative; (b) by registered post or speed post with acknowledgment due; (c) or service by the party himself. (3)Where a notice issued by the Tribunal is served by the party himself by hand delivery, he shall file with the Registrar or such other person duly authorised by the Registrar in this behalf, the acknowledgment together with an affidavit of service and in case of service by registered post or by speed post, file with the Registrar, or Such other person duly authorised by the Registrar in this behalf, an affidavit of service of notice alongwith the proof of delivery. (4) Notwithstanding anything contained in sub-rules (1) and (2), the Tribunal may after taking into account the number of respondents and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one appeared for the Corporate Debtor . The Adjudicating Authority also recorded matter to proceed ex-parte against corporate debtor and matter to appear for further consideration on 22.07.2021 In the impugned order , the Adjudicating Authority mentioned the fact based on averments made by the 2nd Respondent herein/ the Applicant therein, that despite notice served upon the Corporate Debtor , there is non appearance on behalf of the Corporate Debtor and even earlier after delivery of Demand Notice neither any reply was sent by the Corporate Debtor nor any payment was made and no dispute was raised between 10 days on receipt of Demand Notice . This Appellate Tribunal observes from the record available by the 2nd Respondent in his counter filed vide Diary No. 1074 dated 20.12.2021 that the Demand Notice dated 18.07.2020 was issued to the Corporate Debtor and the same was confirmed as delivered by Blue Dart and date of delivery is stated to be 20.07.2020 at 12.36 hours. Similarly, this Appellate Tribunal observes that the 2nd Respondent has filed detailed memo for proof of submissions of unclaimed delivery served on the Respondent dated 23.07.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the 2nd Respondent was complete in all respect, followed laid down procedures and met the threshold limit. As per I B Code, 2016 the application filed under Section 9 is required to be preceded by issue of Demand Notice under Section 8 of the I B Code, 2016. 8. Insolvency resolution by operational creditor. (1) An operational creditor may, on the occurrence of a default, deliver a demand notice of unpaid operational debtor copy of an invoice demanding payment of the amount involved in the default to the corporate debtor in such form and manner as may be prescribed. (2) The corporate debtor shall, within a period of ten days of the receipt of the demand notice or copy of the invoice mentioned in sub-section (1) bring to the notice of the operational creditor (a) existence of a dispute, 1 [if any, or] record of the pendency of the suit or arbitration proceedings filed before the receipt of such notice or invoice in relation to such dispute; (b)the 2 [payment] of unpaid operational debt- (i) by sending an attested copy of the record of electronic transfer of the unpaid amount from the bank account of the corporate debtor; or (ii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plication made under sub-section (2) is complete; (b) there is no 3 [payment] of the unpaid operational debt; (c) the invoice or notice for payment to the corporate debtor has been delivered by the operational creditor; (d) no notice of dispute has been received by the operational creditor or there is no record of dispute in the information utility; and (e) there is no disciplinary proceeding pending against any resolution professional proposed under sub-section (4), if any. (ii) reject the application and communicate such decision to the operational creditor and the corporate debtor, if (a) the application made under sub-section (2) is incomplete; (b) there has been 1 [payment] of the unpaid operational debt; (c) the creditor has not delivered the invoice or notice for payment to the corporate debtor; (d) notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility; or (e) any disciplinary proceeding is pending against any proposed resolution professional: Provided that Adjudicating Authority, shall before rejecting an application under subclause (a) of clause (ii) give a n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court of India has also held in catena of the judgments that the role of the Adjudicating Authority should be limited to establish that debt is due, remains unpaid and default has occurred with minimum threshold of Rs. 1 crore, then the Adjudicating Authority should admit the Section 9 application. The Apex Court has also held that their should be minimum judicial interventions. Based on all above, this Appellate Tribunal has no hesitation in holding that the Adjudicating Authority has not erred on this issue. 26. Issue (III) Whether, any dispute was pre-existing which should have been considered by the Adjudicating Authority . As already discussed in preceding paragraphs that the fact of pre-existing dispute, if any, are required to be brought to the notice of Operational Creditor withing 10 days of the receipt of Demand Notice dated 18.07.2020 which was delivered to the Appellant on 20.07.2020. It is seen that no reply was given to the said Demand Notice and as such no pre-existing dispute was brought to the notice of the Operational Creditor i.e. 1st Respondent herein. Similarly, despite attempting to serve the petition filed under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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