{"id":221949,"date":"2019-11-11T10:15:52","date_gmt":"2019-11-11T04:45:52","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=221949"},"modified":"2019-11-29T10:45:59","modified_gmt":"2019-11-29T05:15:59","slug":"nclat-demand-notice-issued-under-s-8-ibc-against-corporate-debtor-for-dues-of-sister-concern-group-company-is-not-valid","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2019\/11\/11\/nclat-demand-notice-issued-under-s-8-ibc-against-corporate-debtor-for-dues-of-sister-concern-group-company-is-not-valid\/","title":{"rendered":"NCLAT | Demand notice issued under S. 8 IBC against Corporate Debtor for dues of sister concern\/group company is not valid"},"content":{"rendered":"

National Company Appellate Tribunal (NCLAT):\u00a0<\/strong>The Bench of Justice A.I.S Cheema, Member (Judicial), Kanthi Narahari, Member (Technical) and V.P. Singh, Member (Technical), allowed an appeal filed against the order of the National Company Law Tribunal, New Delhi, whereby it had admitted the petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 (for initiation of Corporate Insolvency Resolution Process), filed by the Operational Creditor\u00a0 against the Flywheel Logistics Solutions (P) Ltd. (Corporate Debtor).<\/p>\n

The material fact to note is the Operational Creditor provided freight services to the Corporate Debtor and dues were pending which were not paid by the Corporate Debtor. Hence, the Operational Creditor issued a Demand Notice under Section 8 and, subsequently, initiated the corporate insolvency resolution process. The appellant (shareholder) of the Corporate Debtor) contended that the Demand Notice served by the Operational Creditor relates to a separate corporate entity.<\/p>\n

The question of law that arose for consideration was:\u00a0“Whether the demand notice issued under Section 8 of the I & B Code 2016, against the corporate debtor, for the dues of sister concern\/group company, can be treated as a valid notice?<\/strong><\/p>\n

On perusal of record, the Appellate Tribunal noted as admitted that the invoices were issued by the Operational Creditor against “Flywheel Logistics (P) Ltd.”. which was different from the Corporate Debtor, “Flywheel Logistics Solutions (P) Ltd.”. It was on record that two were different corporate entities, having different CIN Number and different registered addresses. The Appellate Tribunal observed:\u00a0“It is also on record that the mandatory primary requirement for filing a petition under Section 9 of the \u2018Insolvency and Bankruptcy Code, 2016\u2019 is the service of the Demand Notice under Section 8 of the Code. The demand notice should have been served along with the copy\/bill(s) \/ invoice(s) on the \u2018Corporate Debtor\u2019. But in the present case, the Bill \/ Invoice was raised against, Flywheel Logistics Private Limited, having CIN No. U60200DL2009PTC192531, whereas the mandatory demand notice under Section 8 of the \u2018IBC\u2019 has been served against the \u2018Flywheel Logistics Solutions Pvt. Ltd.\u2019 having CIN No. U60232DL2015PTC288609.”<\/strong><\/p>\n

In such circumstances, the Appellate Tribunal held that the\u00a0Demand Notice issued against the Corporate Debtor was not a valid notice under Section 8 IBC.\u00a0<\/strong>Accordingly, the appeal was allowed and the impugned order passed by the NCLT, New Delhi was set aside. [Anil Syal v. Sanjeev Kapoor, 2019 SCC OnLine NCLAT 630<\/b><\/a>, decided on 08-11-2019]<\/p>\n","protected":false},"excerpt":{"rendered":"

National Company Appellate Tribunal (NCLAT):\u00a0The Bench of Justice A.I.S Cheema, Member (Judicial), Kanthi Narahari, Member (Technical) and V.P. Singh, Member (Technical), allowed <\/p>\n","protected":false},"author":8808,"featured_media":153604,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,11],"tags":[30596,31402,38220],"class_list":["post-221949","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-tribunals_commissions_regulatorybodies","tag-corporate-debtor","tag-demand-notice","tag-section-8-ibc"],"yoast_head":"\nNCLAT | Demand notice issued under S. 8 IBC against Corporate Debtor for dues of sister concern\/group company is not valid | SCC Times<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.scconline.com\/blog\/post\/2019\/11\/11\/nclat-demand-notice-issued-under-s-8-ibc-against-corporate-debtor-for-dues-of-sister-concern-group-company-is-not-valid\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"NCLAT | Demand notice issued under S. 8 IBC against Corporate Debtor for dues of sister concern\/group company is not valid\" \/>\n<meta property=\"og:description\" content=\"National Company Appellate Tribunal (NCLAT):\u00a0The Bench of Justice A.I.S Cheema, Member (Judicial), Kanthi Narahari, Member (Technical) and V.P. 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