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TMI Blog2022 (2) TMI 1176X X X X Extracts X X X X X X X X Extracts X X X X ..... solution Process shall be on the date on which an application is made. To put it precisely, the date of default is not to come into operative play and the same ought not to be taken into account for anything but computing the period of limitation - in the present case, the application was made before the Adjudicating Authority by the Applicant/Appellant which came to be listed on 12.03.2021, however, the Demand Notice was issued on 10.02.2020, after the date of amendment to Section 4 of the Code. Even though the Appellant/Applicant had averred that ₹ 17,91,112/- being the outstanding sum claimed in the Application from the due date i.e. 29.12.2018 till 10.10.2020, in regard to the outstanding invoice dated 02.07.2018, the threshold limit under Section 10A of the Code for initiation of CIRP is ₹ 1 crore (vide Notification to Section 4 of the Code dated 24.03.2020), this Tribunal taking note of the fact that the Section 4 of the Code which specifies the minimum threshold of ₹ 1 crore, the same shall apply and since the sum claimed in the Application was ₹ 17,91,112/-, below the sum of ₹ 1 crore and the present application having been filed on 12.03.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sal of the application/petition in CP/IB/23/CHE/2021, passed by the Adjudicating Authority , (National Company Law Tribunal, Division Bench, Court No.1, Chennai), the Learned Counsel for the Appellant contends that the Appellant/Operational Creditor had sold and supplied the goods in question to the Respondent/Corporate Debtor and that the Respondent/Corporate Debtor had received, accepted and used those goods for its own purpose and that the Corporate Debtor has never raised any Dispute as to the quality or quantity of the material. 4. The Learned Counsel for the Appellant/Operational Creditor takes a plea that the Corporate Debtor had not raised any Dispute even after issuing the Demand Notice and that the Corporate Debtor in its Reply letter dated 2.11.2020 had prayed for 5-6 months time to pay the dues of ₹ 12,54,232/- and that no Dispute was raised as to the quality and quantity of goods supplied and instead prayed for sometime to clear the dues, as they were in a very bad financial position due to pandemic. 5. The Learned Counsel for the Appellant points out that the Appellant/Operational Creditor had filed the application/petition under Section 9 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evant words are conspicuously absent and besides there being no implicit inference to be drawn for such a construction in the context in issue. That apart, if the notification dated 24.03.2020 of the Ministry of Corporate Affairs, Government of India, is made applicable to the pending applications of IBC (filed earlier to the notification in issue) it will create absurd results of wider implications / complications. 57. In view of the upshot and also this Tribunal, on a careful consideration of respective contentions advanced on either side and considering the facts and circumstances of the instant case in a conspectus fashion holds unhesitatingly that the notification dated 24.03.2020 of the Ministry of Corporate Affairs, Government of India, is prospective in nature and it is not retrospective or retroactive in nature. Further, the said notification will not apply to the pending applications filed before the concerned Adjudicating Authority (Authorities), under IBC (waiting for admission), prior to the issuance of the aforesaid notification, as opined by this Tribunal. Viewed in the above perspectives, the conclusion arrived at by the Adjudicating Authority in the impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fails to fulfil the requirement of the Section 4 of the I B Code. RESPONDENT S DECISION: 14. The Learned counsel for the Respondent refers to the judgement of this Tribunal in Jumbo Paper Products Vs. Hansraj Agro Fresh Pvt Ltd wherein it is observed that threshold limit of ₹ 1,00,00,000/- will be applicable for an application filed under Section 7 or 9 on or after 24.03.2020, even if default was of a date, earlier than 24.03.2020. 15. The Learned Counsel for the Respondent adverts to the decision of Hon ble High Court of Kerala in Tharaken Web Innovations Pvt Ltd V National Company Law Tribunal for the proposition that no application can be filed after 24.03.2020 with regard to a sum, where the default is less than ₹ 1,00,00,000/-. 16. The Learned Counsel for the Respondent relies on the order of the Adjudicating Authority (National Company Law Tribunal, New Delhi Bench, Court V) in SS Group Pvt Ltd V. Shiva Asphaltic Pvt Ltd wherein it is observed that the threshold limit of ₹ 1 crore will be applicable for an 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. THE HON BL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 9 and sub-section (5) of Section 10. Section 7 deals with the initiation of the CIRP by a financial creditor; Section 8 provides for the insolvency resolution by an operational creditor; Section 9 provides for the application for initiation of the CIRP by an operational creditor; and Section 10 provides for the initiation of the CIRP by a corporate applicant. 34. NCLAT has explained the difference between the initiation of the CIRP and its commencement succinctly, when it observed: 13. Reading the two definition clauses in juxtaposition, it emerges that while the first viz. 'initiation date' is referable to filing of application by the eligible applicant, the later viz. 'commencement date' refers to passing of order of admission of application by the Adjudicating Authority. The 'initiation date' ascribes a role to the eligible applicant whereas the 'commencement date rests upon exercise of power vested in the Adjudicating Authority. Adopting this interpretation would leave no scope for initiation of CIRP of a Corporate Debtor at the instance of eligible applicant in respect of Default arising on or after 25th March, 2020 as the provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 24.03.2020, the threshold limit shall be ₹ 1,00,00,000/- and even if a Default was committed by the Respondent/ Corporate Debtor , earlier to the notification i.e. prior to 24.03.2020 then, for initiating the Corporate Insolvency Resolution Process under Section 9 of the I B Code, the threshold limit shall be considered as ₹ 100,000/- only. 22. The plea of the Appellant/Applicant is repelled by the Respondent/Corporate Debtor based on the ground that Section 4 of the I B Code, is applicable, as its stood, on the date of application and not on the date on which the Debt became due. 23. In the present case, the Application in Form 5 before the Adjudicating Authority was filed by the Appellant/Applicant on 12.03.2021. The Notice of Demand was issued by the Appellant/Applicant to the Respondent/Corporate Debtor on 10.10.2020. The Respondent/Corporate Debtor had issued a Reply dated 02.11.2020 praying for 5-6 months time to pay the dues in question. 24. It must be borne in mind that Section 4 of the I B Code specifies the minimum threshold limit of ₹ 1,00,00,000/- for the Default and in fact, the Central Government had raised the limit from ..... X X X X Extracts X X X X X X X X Extracts X X X X
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