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2022 (1) TMI 515 - AT - Insolvency and BankruptcyMaintainability of application - Actionable claim - vested right in respect of a Fora , albeit he has a Actionable Right - Section 7 or 9 of of I B Code - HELD THAT - This Tribunal aptly points out that a change in Law is undoubtedly a procedural one. A party is to resort to the change under the I B Code, despite the fact that his/its actionable right of cause of action had arisen earlier to an amendment that has been brought about, increasing the threshold limit to ₹ 1 Crore (vide Notification dated 24.03.2020) issued by the Ministry of Corporate Affairs in S.O.1205 ) for considering the Application filed under Section 7 or 9 of of I B Code on after 24.03.2020, even if the Debt is of a date prior to 24.03.2020. In law, a Party has no vested right in respect of a Fora , albeit he has a Actionable Right . After all, the impediment in Section 10(A) of the I B Code is to be viewed from the point of view of the purpose and object sought to be achieved in enacting the same by the Parliament in its wisdom. The limit envisaged under Section 4 of the IBC Code, which was originally for ₹ 1 lakh was increased to ₹ 1 crore by the Central Government through a Notification darted 24.03.2020 thereby the jurisdiction of the Adjudicating Authority was raised from ₹ 1 lakh to ₹ 1 crore. Admittedly, the amount mentioned in the Application before the Adjudicating Authority was ₹ 84,65,550/- and in fact, the Application was filed on 15.09.2020 by the Applicant before the Adjudicating Authority on which date the amendment to Section 4 of the IBC has come into force/existence. The Application is not maintainable - Appeal dismissed.
Issues: Jurisdiction of Adjudicating Authority under IBC, Applicability of Section 10A of IBC, Impact of threshold limit increase to ?1 crore
Jurisdiction of Adjudicating Authority under IBC: The judgment delves into the jurisdiction of the Adjudicating Authority under the Insolvency and Bankruptcy Code (IBC). The impugned order highlighted that the outstanding amount in the application was ?84,55,550, filed on 15.09.2020. The jurisdictional threshold was raised from ?1 lakh to ?1 crore by a notification dated 24.03.2020. The Tribunal noted that the application was filed after the threshold increase, aligning with the amended Section 4 of the IBC. Consequently, the Tribunal agreed with the Adjudicating Authority's decision that the application was not maintainable due to the increased jurisdictional limit. Applicability of Section 10A of IBC: The judgment extensively refers to the applicability and interpretation of Section 10A of the IBC. It cites the decision of the Hon’ble Supreme Court in Ramesh Kymal V. Siemens Ganesa Renewable Power Pvt Ltd, emphasizing the legislative intent behind Section 10A. The section bars the filing of applications for the commencement of Corporate Insolvency Resolution Process (CIRP) for defaults occurring on or after 25 March 2020. The Tribunal elucidates that the retrospective nature of the bar, coupled with the distinction between initiation and commencement dates of CIRP, underscores the protective objective of the provision. It underscores that the purpose of Section 10A is to prevent the initiation of CIRP for defaults arising during the specified period, safeguarding corporate debtors from immediate insolvency proceedings. Impact of threshold limit increase to ?1 crore: Furthermore, the judgment discusses the impact of the threshold limit increase to ?1 crore on the Adjudicating Authority's jurisdiction. It notes that the amendment to Section 4 of the IBC, raising the threshold from ?1 lakh to ?1 crore, was effective from 24.03.2020. The Tribunal emphasizes that parties must adhere to the amended threshold even if the debt predates the amendment. It clarifies that while a party may have an actionable right, there is no vested right in the forum, highlighting the procedural nature of the change. By aligning the application date with the amended jurisdictional limit, the Tribunal concurs with the Adjudicating Authority's decision that the application is not maintainable. In conclusion, the judgment provides a detailed analysis of the issues concerning the Adjudicating Authority's jurisdiction under the IBC, the implications of Section 10A, and the impact of the threshold limit increase to ?1 crore. It underscores the legislative intent behind Section 10A, the retrospective application of the bar on CIRP filings, and the procedural nature of the threshold limit amendment. The Tribunal's decision aligns with the Adjudicating Authority's ruling, dismissing the application as not maintainable in light of the increased jurisdictional threshold and the provisions of Section 10A of the IBC.
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