The Principal Bench of National Company Law Appellate Tribunal ( NCLAT ) has held that mere error of address in Postal Receipt does not bely the sending of notice.
The Operational Creditor supplied polypropylene (PP) to the Corporate Debtor as per the demand raised by the Corporate Debtor. Invoices were raised in the name of the Corporate Debtor. The Operational Creditor filed a Civil Suit against the Corporate Debtor for recovery of amount of Rs.16,44,500/- and was allowed along with interest @ 12% per annum. The Operational Creditor filed Execution Petition. The Operational Creditor issued notice under Section 8 to the Corporate Debtor claiming amount of debt as Rs.25,04,630/-. The notice under Section 8 of the code was not replied by the Corporate Debtor. An Application filed under Section 9 was filed against and replied by the Corporate Debtor. The Adjudicating Authority by the impugned order has admitted the application and appointed an Interim Resolution Professional (IRP), that is, Mr. Manish Kumar Aggarwal. Aggrieved by the order appeal has been filed by the Suspended Director of Corporate Debtor.
The counsel for the appellant submitted that the notice under Section 8 of the Code issued by the Operational Creditor was sent on an incorrect address. It is submitted that inspite of Adjudicating Authority directing the Operational Creditor to bring material to prove service of notice, the Appellant could not prove service of notice before the Adjudicating Authority. Service of notice under Section 8 is mandatory requirement. Without serving notice under Section 8, no Application under Section 9 can be maintained and the Application filed by Operational Creditor was required to be rejected on this ground alone.
Further submitted by the appellant that, application under Section 9 of the Code was filed by the Operational Creditor on the basis of Decree of the Civil Court. The Application filed on the basis of Decree of Civil Court cannot be said to be an Application for an ‘operational debt’. The Respondent was not an Operational Creditor and no ‘operational debt’ being due on the Corporate Debtor, hence, the Application under Section 9 was notmaintainable.
The Tribunal observed that it is clear that notice was addressed at the correct address of the Corporate Debtor, that is, 54-A, Sinik Farm, Khanpur, NewDelhi – 110062. However, in the postal receipt, which was issued by the India Post, instead of No.’54-A’, ‘24’ was mentioned, on the basis of which postal receipt, the Appellant is submitting that notice was not served on the Corporate Debtor. When the notice was issued by the Operational Creditor at the correct address of the Corporate Debtor, we have no doubt that the envelope containing the address of the Corporate Debtor must be same as reflected in the notice. The mere fact that receipt, which was issued by India Post mentions address of the Corporate Debtor instead of No.54-A, it is mentioned 24, does not bely the sending of notice.
Further observed that when we look into the transaction of account on which debt fell due, it is clear that transaction was for supply of polypropylene by the Operational Creditor to the Corporate Debtor and due to non-payment of the amount towards the material supplied by the Operational Creditor, the amount became due. The amount due, thus, is an amount under the provisions of goods and is fully covered with the definition of Section 5(21) of the Code. The fact that amount was adjudicated and a Decree was passed, in no manner take away the nature of ‘operational debt’. The Decree of the Civil Court in favour of the Operational Creditor, in no manner affect the maintainability of the Application filed by the Operational Creditor under Section 9 of the Code.
The Coram of Justice Ashok Bhushan, Chairperson, and Dr. Alok Srivastava, Member (Technical) has held that “we do not find any substance in any of the submission of the learned Counsel for the Appellant. We do not find any error in the judgment of the Adjudicating Authority admitting Section 9 Application filed by the Respondent. There is no merit in the Appeal. The Appeal is dismissed”.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
