Tribunal dismisses insolvency application due to threshold requirement, criteria not met

The Tribunal held that the application under Section 9 of the Insolvency & Bankruptcy Code was not maintainable due to the enhanced minimum threshold requirement set by the Notification dated 24.03.2020. As the default amount was below the revised threshold of Rs. 1 crore, the application against the Corporate Debtor was dismissed, ruling that the criteria to trigger the Corporate Insolvency Resolution Process were not met. The issue of limitation was not further considered, and the application was deemed not maintainable under Section 4 of the IBC.

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Issues:
1. Maintainability of the application under Section 9 of Insolvency & Bankruptcy Code, 2016.
2. Applicability of the Notification dated 24.03.2020 on the minimum threshold for initiating Corporate Insolvency Resolution Process.
3. Consideration of limitation in the case.

Detailed Analysis:
1. The application was filed under Section 9 of the Insolvency & Bankruptcy Code, 2016 for the initiation of Corporate Insolvency Resolution Process against the Corporate Debtor, Unipower Projects Private Limited. The Counsel for the applicant argued that the application was maintainable and within the period of limitation.

2. The key issue revolved around the applicability of the Notification dated 24.03.2020, which enhanced the minimum threshold from Rs. 1 lakh to Rs. 1 crore for triggering the Corporate Insolvency Resolution Process. The Counsel contended that the notification did not apply to this case as the default occurred before its issuance. However, the Tribunal referred to a decision by the Hon'ble NCLAT, which clarified that the enhanced threshold would be applicable to applications filed on or after 24.03.2020, even if the debt was prior to that date. Since the application was filed on 11.09.2021, well after the notification, the Tribunal held that the minimum threshold of Rs. 1 crore was not met as the default amount was only Rs. 3,00,438.

3. The Tribunal concluded that due to the enhanced minimum threshold requirement set by the notification, the application did not fulfill the criteria to trigger the Corporate Insolvency Resolution Process. Therefore, the application was deemed not maintainable under Section 4 of the IBC, and the issue of limitation did not need to be further considered. Consequently, the Tribunal dismissed the application based on this analysis.

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