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2021 (10) TMI 1279 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - alleged debt that is claimed to be payable in application under section 9 is below the threshold limit stipulated in the notification S.O 1205(E) dated 24.3.2020 issued by the Ministry of Corporate Affairs Government of India or not - HELD THAT - A perusal of the judgment in MADHUSUDAN TANTIA VERSUS AMIT CHORARIA FOSECO INDIA LIMITED 2020 (10) TMI 547 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI shows that the demand notice under section 8 was issued on 31.7.2019 and the application under section 9 was filed on 5.9.2019. Both these dates are before 24.3.2020 and therefore threshold limit of the debt as per Law at the time the application under section 9 was filed was 1 lakh - the facts of the instant appeal are not same as the facts in the said judgement as a result said judgement is not applicable. It is seen that notification dated 24.3.2020 makes it unambiguously clear that the threshold limit to be considered for section 9 application will be 1 crore. This threshold limit will be applicable for application filed u/s. 7 or 9 on or after 24.3.3020 even if debt is of a date earlier than 24.3.2020. Since the application under section 9 which is the subject matter of this appeal was filed on 13.9.2020 therefore the threshold limit of 1 crore of debt will be applicable in the present case. There are no reason to admit the appeal - appeal dismissed.
Issues:
- Application under section 9 of the Insolvency and Bankruptcy Code, 2016 dismissed by NCLT, Allahabad Bench. - Dispute regarding the application of notification S.O 1205(E) dated 24.3.2020. - Retrospective application of the notification. - Interpretation of Section 4 of the IBC. - Applicability of the threshold limit for debt in default. Analysis: The Appellate Tribunal considered an appeal where the Adjudicating Authority had dismissed the application filed under section 9 of the Insolvency and Bankruptcy Code, 2016. The Operational Creditor had claimed that the Corporate Debtor owed a debt since 27.5.2018. However, the Adjudicating Authority dismissed the application citing notification S.O 1205(E) dated 24.3.2020, which raised the threshold limit of debt from ?1 lakh to ?1 crore for applications under section 7 or section 9. The Operational Creditor argued that the notification could not be applied retrospectively and relied on a judgment by NCLAT to support this claim. They contended that since the debt was payable on the date of filing the application, i.e., 13.9.2020, the debt in default related to a period before the issuance of the notification. The Appellant cited judgments by NCLAT and the Apex Court to support their argument against the retrospective application of the notification. The Tribunal examined Section 4 of the IBC, which specifies the minimum amount of default for insolvency proceedings. The notification dated 24.3.2020 raised the threshold limit to ?1 crore for applications under section 7 or section 9. The Tribunal also analyzed the judgment in Madhusudan Tantia case to distinguish the facts and applicability of the threshold limit in the present case. Considering the arguments presented and the legal provisions, the Tribunal concluded that the notification clearly set the threshold limit for debt at ?1 crore for applications filed on or after 24.3.2020. Since the application under section 9 was filed on 13.9.2020, the threshold limit of ?1 crore was applicable. Therefore, the Tribunal dismissed the appeal at the admission stage, finding no reason to admit it based on the presented reasons and legal interpretations.
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