Sudeep Bhandari vs Maurya Distillers And Bottlers Pvt. Ltd.

Dr. V.K. Subburaj, Member (T)

This is an application filed by the Applicant Shri Sudeep Bhandari seeking to initiate CIRP against the Respondent M/s. Maurya Distillers & Bottlers Private Limited under Section 9 of Insolvency and Bankruptcy Code 2016 ("the Code") for the alleged default on the part of the corporate debtor in settling an amount of Rs. 8,56,774/- including the interest component towards the supply of materials effected by the Applicant.

We have perused the documents filed by the Applicant. Perusal of the details in the application as well as the 9(3)(b) affidavit reveals that the Demand Notice under Section 8 of the IBC 2016 dated 24.09.2019 sent by the Applicant to the Respondent at its registered office through speed post on 25.09.2019 returned back with the endorsement 'insufficient address'. Learned counsel appearing for the Applicant in course of his argument submitted that of course the notice was not delivered on the registered office but it was delivered on the address of factory. Therefore, it can be treated a valid service and in support of his contention he placed reliance upon a decision passed by the Hon'ble NCLAT in Alloysmin Industries vs. Raman Casting private Limited, Company Appeal (AT) (Insolvency) 684 of 2018 in which the Hon'ble NCLAT held that if the demand notice is delivered either at the registered office or the corporate office then it would be treated as a valid service.

In the light of submissions raised by the Applicant we would like to consider the provision under which a demand notice is required to be served i.e. Regulation 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 which is as follows:

"Demand notice by operational creditor.--(1) An operational creditor shall deliver to the corporate debtor, the following documents, namely.-

(a) a demand notice in Form 3; or

(b) a copy of an invoice attached with a notice in Form 4.

(2) The demand notice or the copy of the invoice demanding payment referred to in section (2) of section 8 of the Code, may be delivered to the corporate debtor,

(a) at the registered office by hand, registered post or speed post with acknowledgement due; or

(b) by electronic mail service to a whole time director or designated partner or key managerial personnel, if any, of the corporate debtor.

(3) A copy of demand notice or invoice demanding payment served under this rule by an operational creditor shall also be filed with an information utility, if any."

Now we shall consider whether the notice delivered at the factory address would be treated as a valid delivery of demand notice or not in the light of decision of the Hon'ble NCLAT. We have gone through the decision passed by the Hon'ble NCLAT and on a careful consideration on the same, I find the Hon'ble NCLAT in said decision held as follows:

"In view of aforesaid facts we hold that the Adjudicating Authority erred in rejecting the application under Section 9 on wrong presumption that demand notice is to be served on the Registered Office of the Corporate Debtor and not on Corporate Office (Industrial Area Office herein). If the demand notice under Section 8(1) is served on Corporate Debtor either on its Registered Office or its Corporate Office, it should be treated to be valid service of notice under Section 8 and application under Section 9 on failure of payment, if filed after 10 days, is maintainable."

In the present case we find the Applicant has mentioned the address of the registered office at page 1 and the factory/works address at page 2 of the application. At this juncture we would like to refer to the difference between the registered office and the corporate office. Although the corporate office is not defined under the Code, in our opinion the corporate office is the main office, also called the headquarter of the corporation, where the executive of the company including the CEO maintains their office. The registered office is the office which is registered with the Registrar of Companies and is available on the website of the Ministry of Corporate Affairs and where service of legal documents, such as notices or service of process is usually done.

We find that nowhere in the application it is mentioned that the factory address is the headquarter or the office from where the executive of the company including the CEO are functioning so under such circumstances we are unable to accept contention of the Applicant that the delivery of demand notice at the factory address will be treated as delivery at the corporate office and that the service is valid.

For the reasons discussed above we are unable to accept the contention of the applicant that in view of the decisions of the Hon'ble NCLAT, the delivery of demand notice can may be treated as valid service rather we are of the considered view that the facts of that case is different from the fact in Alloysmin. Therefore, we dismiss the application for non-compliance of Section 8 with liberty to the Applicant to re-file the applications after delivery of the demand notice under Section 8 of the Code.