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

One Sided Clauses In Builder-Buyer Agreements Is An Unfair Trade Practice

In CIVIL APPEAL NO. 12238 OF 2018, Pioneer Urban Land & Infrastructure Ltd. vs Govindan Raghavan, an appeal was filed before the Supreme Court  by the builder against the order of the National Consumer Forum. The builder had relied upon various clauses of the Apartment Buyer’s Agreement to refute the claim of the respondent but was rejected by the commission which found the said clauses as wholly one-sided, unfair and unreasonable, and could not be relied upon. The Supreme Court on perusal of the Apartment Buyer’s Agreement found stark incongruities between the remedies available to both the parties. For example, Clause 6.4 (ii) of the Agreement entitles the Appellant – Builder to charge Interest @18% p.a. on account of any delay in payment of installments from the Respondent – Flat Purchaser. Clause 6.4 (iii) of the Agreement entitles the Appellant – Builder to cancel the allotment and terminate the Agreement, if any installment remains in arrears for more than 30 da...
Post a Comment
Read more

Inherited property of childless hindu woman devolve onto heirs of her parents

In Tarabai Dagdu Nitanware vs Narayan Keru Nitanware, quashing an order passed by a joint civil judge junior division, Pune, the Bombay High Court has held that under Section 15 of the Hindu Succession Act, any property inherited by a female Hindu from her father or mother, will devolve upon the heirs of her father/mother, if she dies without any children of her own, and not upon her husband. Justice Shalini Phansalkar Joshi was hearing a writ petition filed by relatives of one Sundarabai, who died issueless more than 45 years ago on June 18, 1962. Article referred:http://www.livelaw.in/property-inherited-female-hindu-parents-shall-devolve-upon-heirs-father-not-husband-dies-childless-bombay-hc-read-judgment/
Post a Comment
Read more

Court approached in the early stages of arbitration will prevail in all other subsequent proceedings

In National Highway Authority of India v. Hindustan Steelworks Construction Limited, the Hon'ble Delhi High Court opined that once the parties have approached a certain court for relief under Act at earlier stages of disputes then it is same court that, parties must return to for all other subsequent proceedings. Language of Section 42 of Act is categorical and brooks no exception. In fact, the language used has the effect of jurisdiction of all courts since it states that once an application has been made in Part I of the Act then ―that Court alone shall have jurisdiction over arbitral proceedings and all subsequent applications arising out of that agreement and arbitral proceedings shall be made in that Court and in no other Court. Court holds that NHAI in present case cannot take advantage of Section 14 of the Limitation Act, 1963 for explaining inordinate delay in filing present petition under Section 34 of this Act in this Court.
Post a Comment
Read more