Tribunal dismisses insolvency application due to failure to meet threshold limit under Insolvency and Bankruptcy Code, 2016

The Tribunal dismissed the application under section 9 of the Insolvency and Bankruptcy Code, 2016, ruling it not maintainable due to the failure to meet the threshold limit set post the Ministry of Corporate Affairs notification of 24.3.2020. The Tribunal emphasized the retrospective application of the threshold limit of Rs. 1 crore for section 9 applications, regardless of the debt's origin date. The decision aimed to prevent unnecessary Corporate Insolvency Resolution Process proceedings during the COVID-19 pandemic's impact on companies.

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Issues:
- Application under section 9 of the Insolvency and Bankruptcy Code, 2016 for initiation of Corporate Insolvency Resolution Process.
- Maintainability of the petition in terms of Section 4 of the IBC, 2016.
- Threshold limit for section 9 application post the notification of MCA dated 24.3.2020.
- Retroactive application of the threshold limit.
- Impact of the threshold limit on the present application.

Analysis:
The application was filed under section 9 of the Insolvency and Bankruptcy Code, 2016 by an operational creditor seeking initiation of the Corporate Insolvency Resolution Process against the respondent company. The petitioner claimed non-payment of invoices and interest by the corporate debtor, supported by evidence of liability acceptance and a demand notice.

The Tribunal examined the maintainability of the petition in light of Section 4 of the IBC, 2016. It was crucial to determine if the petition met the statutory requirements for admission. The Tribunal considered the amount claimed by the applicant, which was Rs. 82,13,604, and the date of filing, which was 09.09.2021, in assessing the petition's validity.

Referring to the judgment of Hon'ble NCLAT in a specific case, the Tribunal discussed the retrospective application of the threshold limit set by the Ministry of Corporate Affairs on 24.3.2020. The Tribunal emphasized that the threshold limit of Rs. 1 crore for section 9 applications would apply to cases filed on or after 24.3.2020, regardless of the debt's origin date.

Given that the operational creditor's claim did not meet the threshold limit due to the retrospective application of the notification, the Tribunal concluded that the application could not be admitted. The Tribunal highlighted the legislative intent behind the threshold limit, aiming to prevent unnecessary CIRP proceedings during the COVID-19 pandemic's impact on companies.

Ultimately, the Tribunal dismissed the application, ruling it as not maintainable due to the failure to meet the threshold limit set post the MCA notification. The decision was made without costs, and the parties were instructed to be served with a copy of the order, while the file was consigned to the record room.

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