Tribunal dismisses insolvency application citing COVID-19 impact on debt threshold.

The Tribunal dismissed the application under section 9 of the Insolvency and Bankruptcy Code, ruling it not maintainable due to the debt falling below the prescribed threshold limit of Rs. 1 crore set post 24.03.2020. The judgment emphasized the legislative intent to prevent unnecessary Corporate Insolvency Resolution Process proceedings during the COVID-19 impact, clarifying the retrospective implications of the threshold limit.

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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 application by the operational creditor.
- Dispute regarding the outstanding debt and non-payment by the corporate debtor.
- Threshold limit for debt arising post 24.03.2020 and its applicability on the present application.

Analysis:
1. Application under section 9 of the Insolvency and Bankruptcy Code, 2016:
The applicant, an operational creditor, filed an application seeking initiation of Corporate Insolvency Resolution Process against the respondent company, claiming to be the corporate debtor. The applicant detailed the transactions leading to the petition, including the unpaid invoice, settlement agreements, and subsequent non-payment by the corporate debtor.

2. Maintainability of the application:
The corporate debtor raised objections to the application's maintainability, citing reasons such as being time-barred, lack of authority letter, incomplete filing as per Section 9 of the Code, and a pre-existing dispute regarding goods supplied. The parties presented their contentions, and the Tribunal examined the compliance with the provisions of the Code.

3. Dispute regarding the outstanding debt:
The operational creditor alleged non-payment of a significant amount by the corporate debtor despite follow-ups and a demand notice. The corporate debtor disputed the claim, asserting that the debt was time-barred, and there were unresolved issues concerning the quality of goods supplied. The Tribunal considered these contentions and the evidence presented by both parties.

4. Threshold limit for debt post 24.03.2020:
The Tribunal analyzed the threshold limit applicable to the debt arising post 24.03.2020 as per the notification of the Ministry of Corporate Affairs. Referring to relevant judgments, the Tribunal clarified that the threshold limit of Rs. 1 crore applied to applications filed under section 9 of the Code after the specified date, irrespective of the debt's origin. Based on this interpretation, the Tribunal found that the operational creditor's claim fell below the threshold limit, rendering the application not maintainable.

5. Conclusion:
Considering the threshold limit and the retrospective application of the notification, the Tribunal dismissed the application, ruling it as not maintainable due to the debt amount being below the prescribed threshold. The judgment highlighted the legislative intent behind setting the threshold to prevent unnecessary CIRP proceedings during the COVID-19 impact, emphasizing the prospective nature with retrospective implications. The order was served to the parties, and the file was consigned to the record room.

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