Tribunal dismisses application under amended IBC; emphasizes compliance with increased jurisdictional limit

The Tribunal dismissed the application, ruling it not maintainable due to the increased jurisdictional limit aligning with the amended Section 4 of the IBC and the provisions of Section 10A, which bars CIRP filings for defaults post-25 March 2020 to protect corporate debtors from immediate insolvency proceedings. The judgment emphasizes the procedural nature of the threshold increase to Rs. 1 crore, clarifying that parties must comply with the amended limit even for debts predating the amendment, highlighting the Tribunal's alignment with the Adjudicating Authority's decision.

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Issues: Jurisdiction of Adjudicating Authority under IBC, Applicability of Section 10A of IBC, Impact of threshold limit increase to Rs. 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 Rs. 84,55,550, filed on 15.09.2020. The jurisdictional threshold was raised from Rs. 1 lakh to Rs. 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 Rs. 1 crore:
Furthermore, the judgment discusses the impact of the threshold limit increase to Rs. 1 crore on the Adjudicating Authority's jurisdiction. It notes that the amendment to Section 4 of the IBC, raising the threshold from Rs. 1 lakh to Rs. 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 Rs. 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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