Skip to main content

A mistake in a 'Demand Notice' does not necessarily mean that it is defective

Cause Title : Credberg Advisors India Private Limited vs Platinum Holdings Private Limited, CP(IB)/46 (CHE) /2022, National Company Law Tribunal, Chennai Bench

Date of Judgment/Order : 01.02.2023

Corum : Dr. Deepti Mukesh, Member (Judicial) & Sameer Kakar, Member (Technical)

Citied: 

  1. Ramesh Kymal Vs. M/s. Siemens Gamesa Renewable Power Pt Ltd [ (2021) 3 SCC 224]
  2. Rajendra Bhai Panchal Vs. Jay Manak Steels and Ors [MANU/NL/0387/2020]

Background

An application under Section 9 of the the Insolvency and Bankruptcy Code, 2016 was filed by the Applicant / Operational Creditor. The sole objection of the Respondent / Corporate Debtor was with respect to the maintainability of the present Application. It argued that case of the Operational Creditor with respect to the date of default as per the statutory notice in 'Form 3' read with the present Application in 'Form 5' is 27.11.2020, thus is clearly hit by the period covered under Section 10A of the Code and in support they referred to judgment in Ramesh (supra).

The Operational Creditor by way of an 'Additional Affidavit' dated 03.01.2023 submitted that the date (27.11.2020) as originally mentioned under the present Application was only a typographical error and due to sheer oversight on the part of the Operational Creditor and the correct date would be 24.02.2020.

Judgment

The NCLT while admitting the application and rejecting the objection of the Respondent referred to the judgment in Rajendra (supra) wherein it was decided that a mistake in a 'Demand Notice' does not necessarily mean that it is defective. If a 'Corporate Debtor' wants to question the validity of the demand it is for it to show that the prejudice was suffered by it as a result of defect. If there is a mistake in the demand but the creditor is clearly owed the statutory minimum figure or more, the fact that the debt is mis stated may not automatically invalidate the demand as per decision 'Cardiff Preserved Coal & Coke Co.' V. 'Norton 36 LJ Ch 451. Further, the Court will take into account whether any injustice was caused to the 'Debtor' and even a grossly overstated statutory demand may not automatically be set aside as per decision Re a Debtor (No 490 / SD / 1991), (1992) 2 All ER 664 (ChD).

Therefore, the Corporate Debtor has not and would not be prejudiced by fact that Operational Creditor has mentioned the wrong date of default due to its inadvertence.

Comments

Post a Comment

Most viewed this month

The recovery of vehicles by the financier not an offence - SC

Special Leave Petition (Crl.) No. 8907  of 2009 Anup Sarmah (Petitioner) Vs Bhola Nath Sharma & Ors.(Respondents) The petitioner submitted that  respondents-financer had forcibly taken away the vehicle financed by them and  illegally deprived the petitioner from its lawful possession  and  thus,  committed  a crime. The complaint filed by the petitioner had been  entertained  by  the Judicial Magistrate (Ist Class), Gauhati (Assam) in Complaint Case  No.  608 of 2009, even directing the interim custody of the vehicle (Maruti  Zen)  be given to the petitioner vide order dated  17.3.2009.  The respondent on approaching the Guwahati High  Court against this order, the hon'ble court squashed the criminal  proceedings  pending   before  the  learned Magistrate. After hearing both sides, the Hon'ble Supreme Court decided on 30th...
7 comments
Read more

Vanishing promoters and languishing shareholders

Over Rs 60,000 crore of shareholders’ wealth is stuck in 1,450 companies suspended by the stock exchanges. More importantly, near 100 per cent pledging of promoter holding appears to be common in many of these companies. This, almost rules out any chance of the companies bouncing back. The suspension is for non-compliance of the listing norms. Vanishing Companies - Definition As per the definition stipulated by SEBI, any listed company, which raised moneythrough initial public offer and, thereafter, stopped operations, did not file returnseither with the RoC or SEBI and did not exist on the registered premises wastermed as vanishing.There are provisions under Companies Act under which companies are termedvanishing companies on satisfying certain conditions. it is provided a companywould be deemed to be a vanishing company, if it satisfies all the conditions given below : a) Failed to file returns with Registrar of Companies (ROC) for a period of two years; b) Failed to fil...
3 comments
Read more

Property can be sold on power of attorney - Delhi High Court

As reported in the Hindusthan Times on 5th May:-  http://www.hindustantimes.com/India-news/NewDelhi/Property-can-be-sold-on-power-of-attorney/Article1-1054964.aspx In a judgment that will benefit lakhs of Delhi residents living in co-operative housing societies and DDA flats, the Delhi High Court has quashed a Delhi government circular banning property sale in the Capital through general power of attorney (GPA). The court found that the directions in the circular, issued by the revenue department on April 27 last year, were contrary to the Supreme Court judgment dated October 11, 2011. The HC order will increase the number of saleable properties in Delhi and could bring down the value of freehold properties. According to realty watchers, on an average, around 20% of properties are registered through GPA transfers — a common way of selling leasehold properties and those that don’t have a clear title. The judgment came on a petition filed by a company, Pace Developers and ...
5 comments
Read more