Tribunal upholds dismissal of appeal on Section 9 application due to increased threshold amount

The Tribunal dismissed the appeal against the Adjudicating Authority's decision to dismiss the Section 9 application due to not meeting the enhanced threshold amount set by a Ministry of Corporate Affairs notification. The Tribunal held that the application, filed after the threshold was raised to Rs. One crore, must adhere to the new requirement, emphasizing the significance of the application date in determining the threshold for insolvency proceedings. Despite the dismissal, the Appellant was permitted to explore other legal remedies.

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Issues involved:
The appeal against the order of the Adjudicating Authority dated 27.04.2021 dismissing the Section 9 application based on the threshold amount for triggering insolvency, as affected by a notification issued by the Ministry of Corporate Affairs.

Threshold Amount Issue:
The Appellant issued a notice on 31.01.2020 claiming Rs. 41,81,024, but a notification on 24.03.2020 raised the minimum threshold for insolvency from Rs. One lakh to Rs. One crore. The application was filed on 04.08.2021. The Adjudicating Authority rejected the application for not meeting the enhanced threshold.

Arguments and Decisions:
The Appellant argued that since the Demand Notice predated the notification, the threshold should be Rs. One lakh, citing a Supreme Court case. The Respondent contended that the threshold is based on the application filing date, not the notice date, referencing prior Tribunal judgments. The Tribunal noted the undisputed dates and a similar case, where the application date determined the threshold.

Tribunal's Analysis:
The Tribunal referred to Section 4(1) and Section 6 of the Code regarding the minimum default amount and who may initiate insolvency. It highlighted the amendment raising the threshold to Rs. One crore and emphasized the importance of the application date for determining the threshold. The Tribunal found that the application, filed after the threshold amendment, must meet the new requirement, affirming the Adjudicating Authority's decision to dismiss the Section 9 application.

Judgment and Conclusion:
The Tribunal dismissed the appeal, stating that the application post-amendment should meet the revised threshold. However, it allowed the Appellant to seek other legal remedies despite the Section 9 application dismissal. The Tribunal's decision was based on the application date aligning with the amended threshold requirement, emphasizing the critical role of the filing date in insolvency proceedings.

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