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2022 (6) TMI 167 - 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 - threshold amount to maintain application - HELD THAT - It transpires from the records that although the Demand Notice was issued in 2019, the Operational Creditor has filed the present application in the year 2021 after a lapse of nearly two years. Further, the Operational Creditor has claimed the default on part of the Corporate Debtor for the amount of Rs. 26,20,992/- which is inclusive of interest @18% per annum calculated from 11.07.2018 till 11.01.2021. However the, said amount is below the pecuniary limit fixed by the Central Government vide notification dated 24.03.2020. The present application is filed on 14.02.2021 and the amount claimed in default is less than Rs. 1 Crore. Therefore, in the light of the notification dated 24.03.2020, the present application does not fulfill the minimum threshold limit to trigger the Corporate Insolvency Resolution Process. The instant Application filed by the Applicant under Section 9 of IBC, 2016 is not maintainable - Application dismissed.
Issues:
Initiation of Corporate Insolvency Resolution Process under Section 9 of the Insolvency and Bankruptcy Code, 2016 for alleged default against a Corporate Debtor. Analysis: 1. Application for CIRP: Mr. Aditya Kumar, as the Proprietor of M/s. S.B. Electricals, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 against M/s. LKB Engineering Private Limited for an alleged default amounting to Rs. 26,20,992. The application detailed the transactions between the parties, including excess payments made by the Operational Creditor and subsequent disputes over goods delivery and payments. 2. Contentions by Corporate Debtor: The Corporate Debtor contended that they were not liable to pay the claimed amount, citing issues related to previous transactions and the timeliness of the application. They also argued that the pecuniary jurisdiction of the Tribunal was not met as the application was filed for an amount below the threshold. 3. Operational Creditor's Rejoinder: The Operational Creditor reiterated the debt due date, negotiations, and the relationship established through transactions. They emphasized the jurisdiction of the Tribunal and the intent behind the notification increasing the threshold limit to protect Corporate Debtors during the pandemic. 4. Tribunal's Decision: After reviewing the documents and arguments, the Tribunal noted the lapse of nearly two years between the demand notice and the application filing. Considering the amount claimed and the pecuniary limit set by the Central Government, the Tribunal referred to a relevant judgment and concluded that the application did not meet the minimum threshold limit required to trigger the Corporate Insolvency Resolution Process. Therefore, the application was dismissed. 5. Precedent Reference: The Tribunal referenced a judgment by NCLAT regarding the retrospective application of the threshold limit, emphasizing that the minimum debt amount specified in the notification dated 24.03.2020 was applicable to applications filed after that date, even if the debt was incurred earlier. This reference supported the Tribunal's decision regarding the threshold limit in the present case. In conclusion, the Tribunal dismissed the application for CIRP as it did not meet the minimum threshold limit specified by the Central Government, based on the notification dated 24.03.2020 and the relevant legal precedents cited.
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