Sec. 8 Notice not Required if Statutory Notice in Winding up Petition Served for Plea u/s 9: NCLAT

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notice under section 8 of IBC

Case Details: Rajeev Srivastva v. Ahluwalia Contracts (India) Ltd. - [2023] 150 taxmann.com 403 (NCLAT-New Delhi)

Judiciary and Counsel Details

    • Justice Ashok Bhushan, Chairperson, Rakesh Kumar Jain, Judicial Member & Barun Mitra, Technical Member
    • Ankur Goel, Adv. for the Appellant.
    • Anil K. Airi, Sr. Adv., Mudit Ruhella, Mritunjay K. Singh, Karan Chhibber & Aman Dahiya, Adv. for the Respondent.

Facts of the Case

In the instant case, the corporate debtor awarded construction work through a contract agreement to the operational creditor. However, the work was suspended due to certain Government restraints. The operational creditor demanded compensation for idle costs, administrative costs, depreciation, losses etc. which were settled by the corporate debtor vide e-mail.

Since the construction work did not start, the operational creditor sent a notice under the Companies Act to the corporate debtor and filed a winding-up petition against the corporate debtor before the High Court. The said petition was transferred to the Adjudicating Authority (NCLT) after the enforcement of the IBC.

Upon receiving the record, the NCLT issued notices to both sides. The operational creditor then presented an application under section 9 before the NCLT, which was admitted vide the impugned order.

The appellant i.e. a suspended director of the corporate debtor contended that the section 9 application filed by the operational creditor without serving mandatory notice of demand u/s 8 was not maintainable.

NCLAT Held

The NCLAT held that since the operational creditor had already given a statutory notice in the winding-up petition, it was not necessary or mandatory to serve a notice u/s 8 of the IBC for treating the winding-up petition. Therefore, the NCLAT ruled that the application u/s 9 was maintainable without the service of notice. Thus, there was no merit in the instant appeal and the same was to be dismissed.

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