2021 (2) TMI 1235 - AT - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Coporate Debtor failed to make repayment of its dues - financial creditors - financial debt or not - default as alleged, was below the threshold limit of ₹ 1 Crore notified in terms of Notification dated 24th March, 2020 or not - revocation of shares allotted to Appellant whereas the time value of money does not apply to the revocation of shares - HELD THAT - Let learned counsel for the Respondents file their reply affidavits along with vakalatnamas within two weeks. Rejoinder thereto, if any, may be filed by the Appellant within two weeks thereof. Short written submissions, not exceeding three pages, supported by compilation of relevant judgments may also be filed along with the pleadings. Post the matter for admission (after notice) on 26th March, 2021.

Summary

Issues Involved:
- Appeal against admission of application under Section 7 of I&B Code
- Financial debt below threshold limit
- Claim arising from revocation of shares
- Application of time value of money to revocation of shares

Analysis:
The appeal was filed against the admission of an application under Section 7 of the Insolvency and Bankruptcy Code (I&B Code) by the Adjudicating Authority. The appellant raised concerns that the financial debt, which led to the alleged default, was below the threshold limit of ?1 Crore as notified in a specific Notification. Additionally, the claim was related to the revocation of shares allotted to the appellant, and it was argued that the concept of time value of money does not apply to such revocation of shares.

Upon considering the issues raised, the Tribunal issued notices to the respondents. Mr. Darpan Wadhwa, Senior Advocate, along with Mr. Manish Kaushik, accepted the notice on behalf of Respondent No.1, while Mr. Ritesh Agrawal, Advocate, accepted the notice for Respondent No. 2. The service of notice was deemed complete, and no further notice was to be served upon the respondents.

The Tribunal directed the learned counsel for the respondents to file their reply affidavits along with vakalatnamas within two weeks. The appellant was given the opportunity to file a rejoinder within two weeks of receiving the respondents' submissions. Additionally, the Tribunal allowed short written submissions, not exceeding three pages, supported by relevant judgments to be filed along with the pleadings.

The matter was scheduled for admission after notice on 26th March, 2021. The IRP, Mr. Ritesh Agrawal, informed the Tribunal that the Committee of Creditors had not been constituted yet. As an interim measure, the Tribunal directed that the Corporate Insolvency Resolution Process would continue, but the constitution of the Committee of Creditors would remain on hold until the next hearing date.