2022 (8) TMI 1470 - AT - Insolvency and Bankruptcy

Tribunal Upholds Rejection of Insolvency Application for Not Meeting Rs. 1 Crore Threshold; Appeal Dismissed.

V-Con Integrated Solutions Pvt. Ltd. Versus Argos Technology Resources Pvt Ltd.

V-Con Integrated Solutions Pvt. Ltd. Versus Argos Technology Resources Pvt Ltd. - TMI Issues:- Appeal against dismissal of application under Section 9 of the Insolvency and Bankruptcy Code, 2016 for not meeting the threshold.- Interpretation of the notification dated 24th March, 2020 regarding the threshold amount under Section 4 of the Code.- Application of the notification to cases where default occurred before its implementation.Analysis:The judgment pertains to an appeal filed against the dismissal of an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, on the grounds of not meeting the threshold requirement as per Section 4 of the Code. The application was filed by the Appellant for an amount of Rs. 20,27,659, which was rejected by the Adjudicating Authority. The main contention raised by the Appellant was that since the default occurred before 24th March, 2020, the notification dated 24th March, 2020, which increased the threshold from Rs. 1 Lakh to Rs. 1 Crore, should not be applicable to their case. The Appellant relied on a judgment of the Tribunal in a similar matter to support their argument.Upon considering the submissions and perusing the record, the Tribunal examined the implications of the notification dated 24th March, 2020, which increased the threshold amount under Section 4 of the Code from Rs. 1 Lakh to Rs. 1 Crore. The Tribunal referred to a previous judgment to establish that the notification was prospective and not retrospective in nature. It was clarified that the notification would not affect applications filed under Section 9 before 24th March, 2020, and would only apply to applications filed thereafter. The Tribunal emphasized that the amended provision of Section 4, with the increased threshold, would be applicable to applications filed post the notification's implementation date.The Tribunal concluded that the application filed by the Appellant on 27th March, 2021, was rightly subject to the threshold of Rs. 1 Crore, as per the amended provision effective from 24th March, 2020. The judgment highlighted that the relied-upon precedent did not support the Appellant's argument regarding the application of the unamended provision of Section 4 to cases where the default occurred before the threshold amendment. Consequently, the Tribunal upheld the dismissal of the Appellant's application by the Adjudicating Authority, thereby dismissing the appeal.