Service Of Notice On Email Provided In Section 7 Petition Constitutes Sufficient Compliance With Rule 38(1) Of NCLT Rules: NCLAT

Brief Facts:

Bank of Baroda (BoB) sanctioned a credit facility on 03.09.2024 to Our Company Infrastructure Developers Private Limited (corporate debtor). The corporate debtor defaulted on 31.05.2019, and its account was classified as NPA on 31.08.2019. A notice under Section 13(2) of the SARFAESI Act was issued.

BoB filed an application under section 7 of the Code on 28.09.2024, claiming a default of ₹49,14,07,632/-. The Adjudicating Authority admitted the application by order dated 17.02.2025.

Against the above order, the present appeal has been filed.

Contentions:

The Appellant submitted that the affidavit of service which has been filed by the appellant dated 14.11.2024, indicates that service of notice was served only by email. Service of notice on the corporate debtor is not in accordance with Rule 38 of the NCLT Rules, 2016.

It was further submitted that service by email has to be on the address as given by a petition or application or in reply by the corporate debtor. In the present case, corporate debtor, having not filed any petition, application or reply, service by email could not have been completed.

Per contra, the Respondent submitted that the corporate debtor was well aware of the proceeding initiated against a corporate debtor and deliberately avoided to appear in the Court. Adjudicating authority after giving sufficient opportunity to the corporate debtor has proceeded to pass order finding debt and default.

Observations:

The Tribunal observed that Rule 38(1) of the NCLT Rules clearly provides that notice or process to be issued by Tribunal, maybe served by post or at the email address as provided in the petition or the application or in reply. The reference of the email address as occurring in Rule 38(1) clearly means the email address as provided in the petition.

The Tribunal noted that the Adjudicating Authority permitted service of notice on the corporate debtor via the email address available with the petitioner or the one registered with the MCA. The Section 7 application included the corporate debtor's master data from the MCA, and the registered email therein was used for service.

It further added that the appellant filed an affidavit of service, confirming that notice was served through the email sent by them. In addition to the email dated 24.10.2024, as per the Adjudicating Authority's order of the same date, a follow-up email was also sent, informing about the next hearing date, i.e., 26.11.2024.

The Tribunal further observed that the appellant's submission that service by email was not possible since the corporate debtor had not filed any petition, application, or reply cannot be accepted. Rule 38(1) refers to service "at the email address as provided in the petition or application or in the reply," which includes the email address provided in the Section 7 petition filed by the financial creditor.

Based on the above, the Tribunal held that thus, service on the corporate debtor was validly made using the email in the Section 7 petition. Additionally, the authorised representatives of the bank physically visited the premises and submitted a report.

Accordingly, the present appeal was dismissed.

Case Title:Akhilesh Kumar Versus Bank of Baroda and Anr.

Case Number:Company Appeal (AT) (Insolvency) No. 512 of 2025 & I.A. No. 1946 of 2025

Judgment Date: 04/04/2025

For Appellant: Mr. Mohit Chaudhary and Mr. Raghav Dikshit, Advocates.

For Respondents : Mr. Abhindra Maheshwari, Advocate for IRP.

Mr. Sougat Sinha, Ms. R. Gayathri Manasa and Mr. Navneet Kumar, Advocates for BoB.

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