Case Law Details
Sri D. Srinivasa Rao Vs. Vaishnovi Infratech Ltd (NCLAT)
Brief Facts: An application under Section 9 of the Insolvency and Bankruptcy Code, 2016 against Respondent- ‘Vaishnovi Infratech Ltd.’ (Corporate Debtor) filed by the Appellant- Operational Creditor was rejected by the Adjudicating Authority (National Company Law Tribunal), Hyderabad Bench, Special Bench on the ground that the demand notice as mandated under Section 8(1) of the ‘I&B Code’ was not served on the Corporate Debtor as the same was returned unserved. Whereas the case of the Appellant- Operational Creditor was that the delivery of demand notice sent by the Appellant to Respondent- Corporate Debtor was refused by the Corporate Debtor.
Decision: Appeal Allowed
Reason: The NCLAT held that in view of the material relied upon by the Appellant, which does not appear to have been projected before the Adjudicating Authority to demonstrate that it was not a case of non-issuance/non-delivery of mandatory statutory notice under Section 8(1) of the ‘I&B Code’ on the part of the Appellant Operational Creditor but a case of refusal on the part of the Corporate Debtor to acknowledge the notice. Had the notice been returned unserved on account of the addressee being not available on the given address or the venue of addressee being non-existent or the delivery of notice being frustrated because of some other reason.
But in a case like the present one where it is the Corporate Debtor who refused to accept delivery of the notice, the Adjudicating Authority would not be justified in coming to the conclusion that notice has not been served on the Corporate Debtor. The only inference available in the given circumstances is that the Corporate Debtor was aware of the consequences and it deliberately refused to acknowledge the notice. The fault lies on the part of the Corporate Debtor for which it cannot be rewarded. No fault can be attributed to the Appellant-
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