TaxTMI 
TaxTMI 
2021 (7) TMI 1331
X X X X Extracts X X X X
X X X X Extracts X X X X
....ction 4 of IBC, 2016, by which the minimum threshold amount to trigger the insolvency proceedings is enhanced from one lakh to one crore. 3. Heard the Ld. Counsel for the petitioner and perused the averments made in the application. 4. The following are the admitted facts : i. The invoice was raised by the petitioner on 07.08.2019 & 05.09.2019 in pursuance of the purchase order dated 04.09.2019 received through email. ii. The demand notice was delivered on 16.03.2020, prior to the issuance of the notification dated 24.03.2020. iii. As per the averments made by the Corporate Debtor in its reply to the Demand notice, the Corporate Debtor has received the demand notice on 21.03.2020 (page 118, Annexure-11 of the petition). iv. The Corporate Debtor in its reply to the demand notice has raised the question of maintainability, in view of the minimum threshold amount enhanced from Rs. one lakh to one crore vide notification dated 24.03.2020. 5. It is an admitted fact that prior to the issuance of the demand notice, in order to trigger the insolvency proceedings under part-II, Chapter I, Sections 7, 9 or 10 of IBC, 2016, the minimum threshold am....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... retroactive effect and this has also been held by the Hon'ble NCLAT in case of Madhusudan Tantia vs Amit Choraria, Company Appeal (AT) (Insolvency) No. 557 of 2020. 15. He further contended that nowhere in the IBC, the Central Government is empowered to issue any notification, under the delegated legislation power, which have retrospective effect. 16. He also placed reliance upon the decision of Hon'ble Supreme Court in Indramani Pyarelal Gupta (Dr.) vs W.R. Natu, (1963) 1 SCR 721. 17. He further submitted that even the intention of legislature is to tackle large scale insolvencies as a result of lockdown due to COVID-19 pandemic and for that reason, a new Section 10A was inserted to suspend the operation of Sections. 7, 9, and 10 of IBC with effect from 25.03.2020. 18. Now, in the light of the aforesaid submissions, we consider the prayer of the applicant. 19. Before considering the submissions, we would like to refer to Section 4 of IBC, 2016, which empowers the Central Government to enhance the minimum amount of default to the extent of one crore rupees and the said section is quoted below: "IBC Section 4: Application of this Part. (1) This Part....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d but not admitted by the Adjudicating Authority against the Corporate Debtor. iv. Where application has been admitted for initiation of CIRP against the Corporate Debtor. 24. So far as the circumstances referred to point nos. (iii) & (iv) are concerned, there is no dispute regarding the non-applicability of the notification dated 24.03.2020 because every notification has prospective effect unless and until it is specifically mentioned in the notification that the same will have the retrospective effect. 25. Now, we consider the circumstance no. (i) where the default has occurred prior to the issuance of the notification dated 24.03.2020 and demand notice is also duly delivered but the application is filed after 24.03.2020. As in the case in hand also, the demand notice was duly delivered prior to the notification dated 24.03.2020. 26. At this juncture, we consider the relevant provisions of Section 7, 8, 9 & 10 of IBC, 2016 and the same are quoted below: IBC Section 7- Initiation of corporate insolvency resolution process by financial creditor. (1) A financial creditor either by itself or jointly with other financial creditors, or any other pers....
X X X X Extracts X X X X
X X X X Extracts X X X X
....................................................... (5)................................................................................. (a)...................................................... (b)...................................................... (6)................................................................................. (7)................................................................................. (a)...................................................... (b)...................................................... IBC Section 8 - Insolvency resolution by operational creditor. (1) An operational creditor may, on the occurrence of a default, deliver a demand notice of unpaid operational debtor copy of an invoice demanding payment of the amount involved in the default to the corporate debtor in such form and manner as may be prescribed. (2)................................................................................. (a)...................................................... (b)...................................................... (i)......
X X X X Extracts X X X X
X X X X Extracts X X X X
....btor has committed a default, a corporate applicant thereof may file an application for initiating corporate insolvency resolution process with the Adjudicating Authority. (2)................................................................................. (3)................................................................................. (a)...................................................... (b)...................................................... (3)................................................................................. (a)...................................................... (b)...................................................... (c)...................................................... (4)................................................................................. (a)...................................................... (b)...................................................... (5)................................................................................. 27. When we read all the above provisions under Sections 7, 8, 9 & 1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the course of his arguments contended that a right, which is vested, cannot be divested. No doubt, it is a well settled principle of law that once a right is vested, it cannot be divested. 35. For the reasons discussed above, we are of the considered view that once the default has occurred prior to the issuance of notification dated 24.03.2020 and demand notice was also sent/ delivered prior to that notification, the enhancement of the threshold limit from one lakh to one crore rupees is not applicable in such matters. Hence, circumstances no. (i) is decided in the manner stated above. 36. Now, coming to circumstances no. (ii)i.e., when the default has occurred prior to the notification and demand notice was not sent prior to that notification in that case, whether the present notification dated 24.03.2020 is applicable or not? 37. While deciding the point no. (i), as we observed, an application under Section 7, 9 or 10 IBC can only be filed, when the default has occurred. Therefore, the intention of the legislature is to give right to an aggrieved person under Section 7, 9 or 10 IBC, only when a default has occurred in making the payment of the dues. 38. Once the defau....