Tribunal Upholds Dismissal of Insolvency Application for Failing to Meet Financial Threshold

The Tribunal upheld the Adjudicating Authority's decision, ruling that the application under Section 9 of the Insolvency and Bankruptcy Code was not maintainable as it did not meet the Rs. 1 Crore threshold requirement. The appeal was dismissed, confirming the Authority's jurisdiction to revive applications but emphasizing that the specific application failed to satisfy the pecuniary threshold.

---

---

Issues Involved:
1. Jurisdiction of the Adjudicating Authority to revive the Application.
2. Pecuniary jurisdiction and threshold requirements under Section 9 of the Insolvency and Bankruptcy Code (IBC).

Issue-Wise Detailed Analysis:

1. Jurisdiction of the Adjudicating Authority to revive the Application:
The Appellant challenged the Adjudicating Authority's decision, which held that there is no provision in the IBC for reviving an application once withdrawn. The Appellant relied on the judgment in "Shree Bhadra Parks and Resorts Ltd. vs. Sri Ramani Resorts and Hotels Pvt. Ltd." where it was held that the Adjudicating Authority has jurisdiction under Rule 11 of the NCLT Rules to revive an application. The Tribunal observed that the inherent power of the Tribunal is based on the principle that "an act of Court shall prejudice no person" and can be exercised to meet the ends of justice. Another judgment cited was "Pooja Finlease Ltd. Vs. Auto Needs (India) Pvt. Ltd. & Anr." where the Tribunal had set aside the order refusing to revive the company petition. Consequently, the Tribunal concluded that the Adjudicating Authority did not lack jurisdiction to revive the company petition, and the observation that there is no enabling provision in the Code to revive the application was erroneous.

2. Pecuniary Jurisdiction and Threshold Requirements under Section 9 of the IBC:
The second issue addressed was whether the application under Section 9 was maintainable given that the claimed amount was only Rs. 46,64,249/-, below the threshold of Rs. 1 Crore as stipulated by the notification dated 24th March 2020. The Appellant argued that the right to apply for initiating CIRP arose before the notification and that the demand notice was issued prior to the notification. The Tribunal examined Section 4 of the IBC, which specifies that the minimum amount of default for initiating insolvency proceedings is Rs. 1 Crore, effective from 24th March 2020. The Tribunal held that the threshold of Rs. 1 Crore is a substantive condition that must be fulfilled for initiating CIRP. It was emphasized that the notification is prospective and applies to applications filed after 24th March 2020, even if the default occurred before this date. The Tribunal referred to several judgments, including "V-Con Integrated Solutions Pvt. Ltd. vs. Argos Technology Resources Pvt. Ltd." and "B. Sreekala vs. Al Sadiq Sweets and Ors.", where it was held that applications filed after 24th March 2020 must meet the Rs. 1 Crore threshold, regardless of when the default occurred.

The Tribunal also discussed the judgment in "Manish Kumar Vs. UoI," which clarified that a right of action can be a vested right subject to the conditions existing at the time of filing. Therefore, the application filed by the Appellant on 08.09.2021 did not meet the threshold requirement of Rs. 1 Crore and was not maintainable. The Tribunal concluded that reviving the application would serve no purpose as it did not meet the statutory threshold.

Conclusion:
The Tribunal upheld the Adjudicating Authority's order, stating that the application under Section 9 was non-entertainable due to not fulfilling the Rs. 1 Crore threshold requirement. The appeal was dismissed, affirming that the Adjudicating Authority had jurisdiction to revive applications but the specific application in question did not meet the necessary pecuniary threshold.

---