Tribunal allows appeal, sets aside Impugned Order, establishes Appellant's locus

The Tribunal allowed the appeal, setting aside the Impugned Order and establishing the Appellant's locus. It found that invoices issued after 25th March 2020 were barred by Section 10A of IBC, and the outstanding amount did not meet the Rs. 1 crore threshold for initiating CIRP under Section 9, rendering the Petition non-maintainable. The Tribunal directed the IRP to apply for fees and expenses as per the law.

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Issues Involved:
1. Locus of the Appellant.
2. Applicability of Section 10A of IBC.
3. Compliance with the threshold limit of Rs. 1 crore for initiating CIRP under Section 9 of IBC.

Issue-wise Analysis:

Issue (i): Locus of Appellant

The Appellant, a Financial Creditor (FC) and homebuyer of the "Blossom Zest" project, was not a party in the Section 9 IBC Petition adjudicated by NCLT on 22nd March 2022. The Appellant had filed an Intervention Application in the Section 9 Petition, which was withdrawn upon advice to file a separate Section 7 Petition. The Appellant argued that the Section 9 Petition was intended to frustrate their Section 7 Petition, and they were directly aggrieved by the Impugned Order, affecting the financial interests of hundreds of homebuyers. The Tribunal found the Appellant to be an aggrieved party with the right to appeal under Section 61 of the IBC, thus establishing their locus in the present appeal.

Issue (ii): Applicability of Section 10A of IBC

Section 10A of IBC, introduced during the COVID-19 pandemic, suspends the initiation of CIRP for defaults arising on or after 25th March 2020 for a specified period. The Tribunal examined two disputed invoices dated 1st April 2020 and 4th April 2020, which were issued after 25th March 2020. These invoices were barred by Section 10A of IBC. The Tribunal noted that the demand notice issued on 10th April 2020 included these invoices, which should not have been considered due to the suspension period under Section 10A.

Issue (iii): Compliance with the threshold limit of Rs. 1 crore for initiating CIRP under Section 9 of IBC

Section 4 of IBC requires a minimum default amount of Rs. 1 crore for initiating CIRP. The Respondent (Operational Creditor) claimed outstanding dues of Rs. 1,08,12,591/-. However, excluding the two invoices barred by Section 10A, the outstanding amount fell below the threshold limit of Rs. 1 crore. The Tribunal noted discrepancies in the claimed amounts and concluded that the Petition did not meet the threshold requirement, making it non-maintainable.

Conclusion:

The Tribunal allowed the appeal, set aside the Impugned Order dated 22nd March 2022, and held that the Appellant had locus in the case. The two invoices dated 1st April 2020 and 4th April 2020 were barred under Section 10A of IBC, and the outstanding amount fell below the threshold limit of Rs. 1 crore, rendering the Section 9 Petition non-maintainable. The Tribunal also directed the IRP to file an application for fees and expenses before the Adjudicating Authority as per law.

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