# In the matter of Dawar International Electronics Pvt. Ltd. CP (IB) No.19-Chd-Hry-2019

> NCLT judgment dated 2021-02-10. Citation: TCN-2021-NCLT-03075. A.O. Smith India Water Products Pvt. Ltd. (Operational Creditor) filed a petition under Section…

- **Court:** NCLT
- **Order date:** 10 Feb 2021
- **Citation:** TCN-2021-NCLT-03075
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/dawar-international-electronics-pvt-ltd-cp-ib-no19-chd-hry-2019-12fb04e3

## Summary

### Background

A.O. Smith India Water Products Pvt. Ltd. (Operational Creditor) filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, against Dawar International Electronics Pvt. Ltd. (Corporate Debtor) for initiating Corporate Insolvency Resolution Process (CIRP). The operational creditor claimed that the corporate debtor defaulted on payments for goods (water heaters) supplied, with a total unpaid operational debt of ₹3,26,937.43/- due since 03.02.2017. The operational creditor issued demand notice in Form No.4 dated 31.07.2018, which was served to the corporate debtor. Despite this, the corporate debtor failed to make the payment or dispute the debt.

## Facts

A.O. Smith India Water Products Pvt. Ltd. (Operational Creditor) initiated Corporate Insolvency Resolution Process (CIRP) against Dawar International Electronics Pvt. Ltd. (Corporate Debtor) under Section 9 of the Insolvency and Bankruptcy Code, 2016. The operational creditor is engaged in the business of manufacturing water heaters. The corporate debtor placed orders for the purchase of goods, and the operational creditor issued two invoices, Hry/0537/16-17 and Hry/0538/16-17, both dated 20.12.2016. The total amount claimed to be in default is ₹3,26,937.43/-, which was due on 03.02.2017. A demand notice in Form No.4 dated 31.07.2018 was served upon the corporate debtor via speed post and email. The corporate debtor failed to repay the unpaid operational debt within 10

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## Issues and analysis

### Issue 1: Whether the demand notice in Form No.4 …

**Ratio:** The service of a demand notice is a mandatory requirement under Section 8 of the

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**Reasoning:** The court observed that the demand notice was sent to the corporate debtor's registered

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**Interpretation:** The demand notice must be served in accordance with the provisions of the Code

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**Application:** In this case, the demand notice was sent to the correct address and via email,

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## Parties

- **Judges:** Ajay Kumar…; RAGHU N…; +1 more
- **Appellants:** A.O. Smith India…
- **Respondents:** Dawar Internationa…

## Timeline

- **2016-12-20 — Invoices…**: Operational creditor issued invoices Hry/0537/16-17 and Hry/0538/16-17 to the corporate…
- **2017-02-03 — Payment Du…**: The payment of…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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