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2022 (2) TMI 1431 - AT - Insolvency and BankruptcyRestraining the Corporate Debtor, its directors, employees, agents, assignees etc. from disposing of their immoveable (Plant machinery and other fixed assets) and immoveable property - threshold limit involved in Section 9 Application - HELD THAT - By Notification dated 24.03.2020, the threshold for entertaining an Application under Section 9 has been raised from Rs. 1 Lakh to Rs. 1 Crore. The Notification and the provisions for increasing threshold, shall operate Comp. App. (AT) (Ins.) No. 129 of 2022 prospectively i.e. after 24.03.2020 - In the present case, the Application was filed by the Operational Creditor on 10.08.2020 i.e. subsequent to above Notification raising the threshold. The amount claimed in Section 9 Application only Rs. 39 Lakh hence, it was less than the threshold and Application ought to have been thrown out on this ground. The Adjudicating Authority on 16.02.2021 has noticed the question and has granted time to Petitioner to explain. When the Application itself was not maintainable by virtue of Notification dated 24.03.2020, there was no necessity to proceed any further or pass any interim order as passed on 29.09.2021 - application not maintainable and deserves to be dismissed - appeal allowed.
Issues:
1. Maintainability of the Application under Section 9 due to the threshold amount requirement. 2. Validity of the interim order passed by the Adjudicating Authority restraining the Corporate Debtor from disposing of assets. Analysis: 1. Maintainability of the Application under Section 9: The appeal was filed against an order restraining the Corporate Debtor from disposing of assets due to an Application under Section 9 claiming a defaulted amount of Rs. 39 Lakhs. The appellant argued that the Application was not maintainable as the claimed amount was below the revised threshold of Rs. 1 Crore set by a notification dated 24.03.2020. The Operational Creditor, however, contended that since a notice under Section 8 was issued earlier, the Application could still be entertained post the threshold revision. The Tribunal noted that the Application was filed after the threshold revision and the claimed amount was below the new limit. It held that the Application was not maintainable as per the revised threshold, and the Adjudicating Authority should have dismissed it instead of passing an interim order. 2. Validity of the Interim Order: The Tribunal found that since the Application was not maintainable due to the threshold issue, there was no basis for the Adjudicating Authority to proceed further or issue the interim order restraining the Corporate Debtor. The Tribunal emphasized that the Application did not fulfill the statutory requirements under Section 4 of the Code. Consequently, the Tribunal allowed the appeal, set aside the interim order dated 29.09.2021, and rejected Application No. IB-100/(ND)/2021. The Tribunal directed the Registry to inform the National Company Law Tribunal to record the rejection of the Application. No costs were awarded in this matter. In conclusion, the Tribunal ruled that the Application under Section 9 was not maintainable due to the threshold amount requirement and thus set aside the interim order passed by the Adjudicating Authority. The judgment highlighted the importance of adhering to statutory requirements and thresholds set by law in insolvency proceedings.
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