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2025 (2) TMI 594

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....8,000/- allegedly due and payable by the Corporate Debtor (CD). 3. The Appellant set the date of default as 24.01.2019 on which the payment was due from the CD against invoice raised as per the MOU/Agreement. 4. As per the case of the Appellant, it is involved and decided to extirpate environmental pollution mainly created by the industries. It is alleged that the director of the CD Mr. S Chandrasekhar met Mr. Chackravarthi D Iyengar, director of the OC and discussed regarding technologies and their applications and sought help from the OC to spread their superior and sustainable technologies in the country which was lacking due to governmental screening and regulations for new players/technologies and lack of investment both fund and non-fund based and due to the lack of support from the Bank etc. It was proposed that Mr. Iyengar, director of the OC/Appellant may come on the board of the CD as an active member of the CD but since they were not in a position to pay monthly fees/remuneration, therefore, the said director asked them to pay full fees upon acquiring each contract which was accepted by the CD and thereafter entered into one MOU on 11/15.06.2018 with the OC as per whic....

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.... remuneration of Mr. Chackravarthi D. Iyengar in terms of WhatsApp acceptance. The Corporate Debtor paid a total sum of Rs. 22.21 lakhs to the Operational Creditor which is not disputed by the applicant also. Apart from this the Operational Creditor has claimed compensation of Rs.48 lakhs towards sweat equity and Rs.100 lakhs for lost opportunities. 8. On the co-joint reading of the MOU dated 15.06.2018 and 25.11.2018, this bench finds that Mr. Chackravarthi D. Iyengar was appointed on the Board of the Corporate Debtor to mobilize additional business and the payment for the services rendered by him was to be made to the Operational Creditor. Though, the MOU dated 25.11.2018 stipulate target volume of business but the compensation clause therein is linked to technology fees to be received by the Corporate Debtor under each work order. Further the said compensation included travel, hotel, structuring the inquiry/ tender to enable participation and incidentals. It is undisputed fact that Corporate Debtor received work orders for 19.6 MLD from Mis. Rajkamal out of 18 tenders listed in Annexure I to MOU dated 11.06.2018. On reading of said MOU also this bench dose not finds that the ....

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.... of the Insolvency and Bankruptcy Code, 2016." 6. Aggrieved against the aforesaid order, the present appeal has been preferred and the only point raised by the Appellant, both in the oral argument as well as in the written submissions that since the Respondent did not reply to the demand notice under Section 8 of the Code, therefore, it cannot raise the defence while contesting the application filed under Section 9 of the Code. 7. On the other hand, Counsel appearing on behalf of Respondent has submitted that notice under Section 8 of the Code is provided in the statute to apprise the CD of the amount alleged to have been defaulted and also an opportunity to the CD to raise an issue as to whether there exist a dispute before the receipt of such notice or the evidence that the amount which has been claimed has already been paid or will be paid and Section 9 application cannot be filed without waiting for 10 days after delivering the notice under Section 8 of the Code. It is submitted that issuance of notice under Section 8 is an obligation on the part of the OC because he cannot maintain the application filed under Section 9 without issuing the notice under Section 8 but there is....

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....application furnish- (a) a copy of the invoice demanding payment or demand notice delivered by the operational creditor to the corporate debtor; (b) an affidavit to the effect that there is no notice given by the corporate debtor relating to a 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; and (d) such other information as may be specified. (4) An operational creditor initiating a corporate insolvency resolution process under this section, may propose a resolution professional to act as an interim resolution professional. (5) The Adjudicating Authority shall, within fourteen days of the receipt of the application under sub-section (2), by an order- (i) admit the application and communicate such decision to the operational creditor and the corporate debtor if,- (a) the application made under sub-section (2) is complete; (b) there is no repayment of the unpaid operational debt; (c) the invoice or notice for payment to the corporate debtor has been delivered by th....

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....-3 of the Rules in which the notice under Section 8 has to be sent. Form - 3 is also reproduced as under- FORM 3 (See clause (a) of sub-rule (1) of rule 5) FORM OF DEMAND NOTICE / INVOICE DEMANDING PAYMENT UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (Under rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016) [Date] To, [Name and address of the registered office of the corporate debtor] From, [Name and address of the registered office of the operational creditor] Subject: Demand notice/invoice demanding payment in respect of unpaid operational debt due from [corporate debtor] under the Code. Madam/Sir, 1. This letter is a demand notice/invoice demanding payment of an unpaid operational debt due from [name of corporate debtor]. 2. Please find particulars of the unpaid operational debt below: PARTICULARS OF OPERATIONAL DEBT 1. TOTAL AMOUNT OF DEBT, DETAILS OF TRANSACTIONS ON ACCOUNT OF WHICH DEBT FELL DUE, AND THE DATE FROM WHICH SUCH DEBT FELL DUE 2. AMOUNT CLAIMED TO BE IN DEFAULT AND THE DATE ON WHICH THE DEFAULT OCCURRED (ATTACH THE WORKINGS FOR COMPUTATION OF DEFAULT IN TABULAR FORM) 3. PARTICU....

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....th the application by the OC. Rules 6 is also reproduced as under:- "6. Application by operational creditor.-(1) An operational creditor, shall make an application for initiating the corporate insolvency resolution process against a corporate debtor under section 9 of the Code in Form 5, accompanied with documents and records required therein and as specified in the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. (2) The applicant under sub-rule (1) shall dispatch forthwith, a copy of the application filed with the Adjudicating Authority, by registered post or speed post to the registered office of the corporate debtor." 14. Form - 5 which is prescribed for filing an application under Section 9 of the Code is also reproduced as under:- Form 5 (See sub-rule (1) of rule 6) 4 [APPLICATION BY OPERATIONAL CREDITOR (S) TO INITIATE CORPORATE INSOLVENCY RESOLUTION PROCESS *UNDER CHAPTER II OF PART II/ UNDER CHAPTER IV OF PART II OF THE CODE [*strike out whichever is not applicable]] (Under rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016) [Date] To, The Natio....

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....ESTIMATED VALUE AS PER THE CREDITOR. ATTACH A COPY OF A CERTIFICATE OF REGISTRATION OF CHARGE ISSUED BY THE REGISTRAR OF COMPANIES (IF THE CORPORATE DEBTOR IS A COMPANY) 2. DETAILS OF RESERVATION / RETENTION OF TITLE ARRANGEMENTS (IF ANY) IN RESPECT OF GOODS TO WHICH THE OPERATIONAL DEBT REFERS 3. PARTICULARS OF AN ORDER OF A COURT, TRIBUNAL OR ARBITRAL PANEL ADJUDICATING ON THE DEFAULT, IF ANY (ATTACH A COPY OF THE ORDER) 4. RECORD OF DEFAULT WITH THE INFORMATION UTILITY, IF ANY (ATTACH A COPY OF SUCH RECORD) 5. DETAILS OF SUCCESSION CERTIFICATE, OR PROBATE OF A WILL, OR LETTER OF ADMINISTRATION, OR COURT DECREE (AS MAY BE APPLICABLE), UNDER THE INDIAN SUCCESSION ACT, 1925 (10 OF 1925) (ATTACH A COPY) 6. PROVISION OF LAW, CONTRACT OR OTHER DOCUMENT UNDER WHICH OPERATIONAL DEBT HAS BECOME DUE 7. A STATEMENT OF BANK ACCOUNT WHERE DEPOSITS ARE MADE OR CREDITS RECEIVED NORMALLY BY THE OPERATIONAL CREDITOR IN RESPECT OF THE DEBT OF THE CORPORATE DEBTOR (ATTACH A COPY) 8. LIST OF OTHER DOCUMENTS ATTACHED TO THIS APPLICATION IN ORDER TO PROVE THE EXISTENCE OF OPERATIONAL DEBT AND THE AMOUNT IN DEFAULT I, [Name of the operational creditor / person authorised to act....