Hyline Mediconz Private Limited vs Anandaloke Medical Centre Private Limited
Company Appeal (AT) (Insolvency) No. 1036 of 2022
Facts:
1.Appellant has rendered services related to installation of Modulation Operation Theatre and General Operation Theatre along with the supply of related equipment. Invoices were raised by the Appellant upon the Respondent from
24.07.2018 to 31.03.2019
2.Invoices being not paid a Demand Notice dated 05.03.2020 under section 8 of the I&B Code was issued demanding an amount of Rs.41,10,166/- including principal and interest. Application was filed by the appellant against the respondent for initiating CIRP under section 9 of the Insolvency and Bankruptcy code 2016 with the Kolkata Bench of the NCLT.
3.Application was rejected by the NCLT by holding that amount claimed being 41,10,166/-,which is below the threshold limit of Rupees One Crore held that the petition is non-maintainable.
Issue: Whether application is maintainable after 24.03.2020 if the default amount is below Rs.1 Crore?
Arguments:
For Appellants:
1.Counsel submitted that default by the Corporate Debtor in paying the outstanding debt having been committed prior to 24.03.2020, by which date threshold of Rupees One Crore was introduced and the Demand Notice having been issued on 05.03.2020 i.e. prior to Notification dated 24.03.2020, the application filed by the Appellant under Section 9 on 18.01.2021 was maintainable
2.It was submitted that date of default is relevant for the purpose of section 4 of the Code. Section 8 notice was also served on the Corporate Debtor before 24.03.2020, hence the Application filed on 18.01.2021 was maintainable. It is further submitted that Section 4 should be harmoniously construed with the provision of Section 10A. The explanation under Section 10A especially refers to default prior to 25.03.2020. The right to action i.e. right to sue has already accrued towards Corporate Debtor prior to 24.03.2020 which could not be taken away by any subsequent Notification
For Respondents:
1.Learned counsel submitted that any application filed after 24.03.2020 has to fulfil the threshold of Rupees One Crore. Even if the date of default is prior to 24.03.2020 and the application is filed after 24.03.2020, threshold of Rupees one crore is to be fulfilled. On the basis of date of default prior to 24.03.2020 no application can be filed after 24.03.2020 which does not fulfil the threshold.
Decision: Application is not maintainable after 24.03.2020 if the default amount is below Rs.1 Crore.
Rationale:
1.NCLAT relying on the scheme of the code noted that Part II of the Code is applicable only when default is of Rupees One Crore or more. There is no right to initiate an application under Section 9 on 24.03.2020 or thereafter if the minimum default of Rupees One Crore is not fulfilled
2.It held that if appellant submission is accepted that date of default or date of demand notice under Section 8 is to be taken and if default is less than Rupees One Crore which occurred prior to 24.032020 right should be given to the applicant to initiate the CIRP after 24.03.2020, it will be clearly contrary to the scheme of the Code as delineated by Section 4, 6, 7, 9 and 10.
3.It relied on Supreme Court judgment in the case of Manish Kumar vs. Union of India & Anr. to conclude that threshold of Rupees One Crore has to be fulfilled by an applicant under Section 9 on the date of filing of the application. The fact that default was committed prior to 24.03.2020 and notice under Section 8 was issued and served prior to 24.03.2020 are not determinative or material although they are condition precedent for initiating an application under Section 9.
Order Copy:
