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2022 (3) TMI 1218 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - monetary amount involved in the appeal - whether the claimed amount falls under the enhanced threshold limit of Rupees One Crore or the earlier threshold limit i.e., prior to the notification of the Ministry of Corporate Affairs (Government of India) dated 24.03.2020 of Rupees One Lakh? - HELD THAT - The Hon'ble NCLAT, New Delhi in a recent decision JUMBO PAPER PRODUCTS VERSUS HANSRAJ AGROFRESH PVT. LTD. 2021 (10) TMI 1279 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI has held that the threshold limit to be considered for the application filed after 24.03.2020 will be Rs. One Crore. This threshold limit will be applicable for the application filed under section 7 or 9 on or after 24.03.2020 even if the debt is of a date earlier than 24.03.2020. This decision of Hon'ble NCLAT is squarely applicable to the facts of the present case. The present petition is filed by the Operational Creditor on 18.02.2021 for the default amount of ₹ 30,95,734/-, which is after the date of said notification - the present application is not maintainable since the default amount is less than the threshold limit prescribed under Section 4 of the IBC, 2016. Petition dismissed.
Issues:
Initiation of Corporate Insolvency Resolution Process under Section 9 of the Insolvency and Bankruptcy Code, 2016; Determination of threshold limit for filing application under Sections 7 or 9 of IBC, 2016. Analysis: The application was filed by the Operational Creditor against the Corporate Debtor for default in paying an operational debt of &8377; 30,95,734. The Operational Creditor supplied goods and issued invoices to the Corporate Debtor, seeking payment. The notice of demand was sent, but the Corporate Debtor did not respond or repay the debt, leading to the application for Corporate Insolvency Resolution Process (CIRP) under Section 9 of the IBC, 2016. The jurisdiction of the Adjudicating Authority was established as the Corporate Debtor's registered office was in Surat-Gujarat. The Corporate Debtor contested the application, arguing that the application did not mention the date of default, which is crucial under the IBC, 2016, and that the application did not meet the threshold limit set under Section 4 of the IBC, 2016. The Corporate Debtor claimed that the threshold limit for filing applications under Sections 7 or 9 had been increased to Rupees One Crore by a notification from the Ministry of Corporate Affairs. The Corporate Debtor's counsel contended that even if the default date was considered as the date of the demand notice, the application did not meet the enhanced threshold limit. During the hearing, the Corporate Debtor's counsel admitted the claimed amount. The key issue revolved around whether the claimed amount fell under the previous threshold limit of Rupees One Lakh or the enhanced limit of Rupees One Crore set by the Ministry of Corporate Affairs. Referring to a decision by the NCLAT, it was established that the enhanced threshold limit of Rupees One Crore applied to applications filed after 24.03.2020, irrespective of the debt date. As the application was filed on 18.02.2021 for an amount below the enhanced threshold limit, the Adjudicating Authority found the application not maintainable under Section 4 of the IBC, 2016. Consequently, the application for initiation of the Corporate Insolvency Resolution Process was dismissed, and no costs were awarded. The judgment highlighted the importance of complying with the threshold limits prescribed under the IBC, 2016 for maintaining the validity of such applications.
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