NCLAT Rules, Service of Notice via Email in Section 7 IBC Petitions Valid Under NCLT Rule 38(1)
Pranav B Prem
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, has held that service of notice on the corporate debtor through the email address provided in a Section 7 petition filed under the Insolvency and Bankruptcy Code, 2016 constitutes valid service under Rule 38(1) of the NCLT Rules, 2016. The judgment was passed by a Bench comprising Justice Ashok Bhushan (Judicial Member) and Mr. Barun Mitra (Technical Member) in the matter of Our Company Infrastructure Developers Private Limited v. Bank of Baroda.
Background
Bank of Baroda had sanctioned a credit facility to Our Company Infrastructure Developers Pvt. Ltd. (the corporate debtor) on 03.09.2014. The corporate debtor defaulted on 31.05.2019, and its loan account was classified as a Non-Performing Asset (NPA) on 31.08.2019. A demand notice under Section 13(2) of the SARFAESI Act was issued thereafter.
Subsequently, the Bank filed a petition under Section 7 of the IBC on 28.09.2020 before the Adjudicating Authority (NCLT), seeking initiation of Corporate Insolvency Resolution Process (CIRP) against the corporate debtor for a default amounting to ₹49,14,07,632/-. The petition was admitted by the NCLT through its order dated 17.02.2025. The present appeal was filed by the suspended director of the corporate debtor challenging the admission order, mainly on the ground that the notice was not served in accordance with Rule 38(1) of the NCLT Rules.
Appellant's Contention
The appellant argued that the service of notice was not valid as it was made only through email. It was contended that Rule 38(1) requires service on the email address mentioned in the reply or application filed by the corporate debtor. Since the corporate debtor had not filed any application, reply, or petition, the appellant claimed that email service was not proper.
Respondent's Response
In response, the Bank of Baroda submitted that the corporate debtor had knowledge of the proceedings and deliberately avoided participation. It was further submitted that the Adjudicating Authority had granted sufficient opportunities to the corporate debtor, including orders to effect service of notice. It was also pointed out that the email address used for service was the one available in the Master Data of the corporate debtor retrieved from the Ministry of Corporate Affairs (MCA) portal, and this was annexed to the Section 7 petition itself.
NCLAT's Observations
The Appellate Tribunal closely examined Rule 38(1) of the NCLT Rules, 2016. The Rule states: “Any notice or process to be issued by the Tribunal may be served by hand, by registered post or speed post, or by electronic means including at the e-mail address as provided in the petition or application or in the reply.”
Interpreting this rule, the Bench held that the reference to "email address as provided in the petition" clearly refers to the address given in the Section 7 petition filed by the financial creditor.
The NCLAT observed: “We are of the view that the interpretation of Rule 38(1) as made by the Appellant is not acceptable. Rule 38(1) clearly provides that service may be at the e-mail address as provided in the petition, and in the present case, the petition contained the Master Data of the Corporate Debtor retrieved from the MCA portal, which included the e-mail address.”
The Tribunal noted that the Adjudicating Authority had directed service through email and that the affidavit of service filed by the financial creditor confirmed compliance. The email containing the notice and the date of the next hearing (26.11.2024) had been sent in accordance with the NCLT’s direction. The service was, therefore, held to be complete. Additionally, the Tribunal observed that representatives of the bank had also visited the registered address of the corporate debtor and submitted a report in compliance with the Tribunal's order, further strengthening the claim of valid service.
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Verdict
Rejecting the appellant's arguments, the NCLAT held that service on the email address provided in the Section 7 petition satisfied the requirement under Rule 38(1) of the NCLT Rules. Since valid service had been effected and the corporate debtor had deliberately remained absent, the Tribunal found no error in the admission of the petition by the NCLT. Accordingly, the appeal was dismissed.
Appearance
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.
Cause Title: Akhilesh Kumar Versus Bank of Baroda and Anr.
Case No: Company Appeal (AT) (Insolvency) No. 512 of 2025 & I.A. No. 1946 of 2025
Coram: Justice Ashok Bhushan [Chairperson], Barun Mitra [Member (Technical)]
[Read/Download order]
