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2022 (6) TMI 104 - Tri - 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 - maintainability of application in terms of Section 4 of the IBC, 2016 - threshold limit involved - HELD THAT - Notification of MCA dated 24.3.2020 makes it unambiguously clear that the threshold limit to be considered for section 9 application will be Rs. 1 crore. This threshold limit will be applicable for application filed u/s. 7 or 9 on or after 24.3.3020 even if the debt is of date earlier than 24.03.2020 - Since the application under section 9 of the code has been filed on 09.09.2021, therefore the threshold limit of Rs. 1 crore of debt will be applicable in the given facts. In the present application the Operational Creditor demanded Rs. 82,13,604/- and the said amount doesn't come within the threshold limit. In fact, the date of the filing has to be seen and not the date of the default or the date of the demand notice, which is immaterial. The intent of legislation to fix the threshold limit was to save the Companies from being rotted to NCLT for initiation of CIRP proceedings, due to COIVD-19 effect. The said notification was always prospective in nature but having retrospective repercussion also. Hence, even if the amount was due prior to 24.03.2020 and the demand notice was send prior to that the petition u/s. 7 or 9 of the Code cannot be filed against the Corporate Debtor. Application not maintainable and is dismissed.
Issues:
- Application under section 9 of the Insolvency and Bankruptcy Code, 2016 for initiation of Corporate Insolvency Resolution Process. - Maintainability of the petition in terms of Section 4 of the IBC, 2016. - Threshold limit for section 9 application post the notification of MCA dated 24.3.2020. - Retroactive application of the threshold limit. - Impact of the threshold limit on the present application. Analysis: The application was filed under section 9 of the Insolvency and Bankruptcy Code, 2016 by an operational creditor seeking initiation of the Corporate Insolvency Resolution Process against the respondent company. The petitioner claimed non-payment of invoices and interest by the corporate debtor, supported by evidence of liability acceptance and a demand notice. The Tribunal examined the maintainability of the petition in light of Section 4 of the IBC, 2016. It was crucial to determine if the petition met the statutory requirements for admission. The Tribunal considered the amount claimed by the applicant, which was Rs. 82,13,604, and the date of filing, which was 09.09.2021, in assessing the petition's validity. Referring to the judgment of Hon'ble NCLAT in a specific case, the Tribunal discussed the retrospective application of the threshold limit set by the Ministry of Corporate Affairs on 24.3.2020. The Tribunal emphasized that the threshold limit of Rs. 1 crore for section 9 applications would apply to cases filed on or after 24.3.2020, regardless of the debt's origin date. Given that the operational creditor's claim did not meet the threshold limit due to the retrospective application of the notification, the Tribunal concluded that the application could not be admitted. The Tribunal highlighted the legislative intent behind the threshold limit, aiming to prevent unnecessary CIRP proceedings during the COVID-19 pandemic's impact on companies. Ultimately, the Tribunal dismissed the application, ruling it as not maintainable due to the failure to meet the threshold limit set post the MCA notification. The decision was made without costs, and the parties were instructed to be served with a copy of the order, while the file was consigned to the record room.
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