December 22, 2021
In this case, an application under Section 9 of the Code was filed against the CD for an alleged default of operational debt to the tune of Rs. 90,00,919.10 (Rupees Ninety Lakh Nine Hundred Nineteen and ten paise only). The CD contended that the amendment to Section 4 of the Code, which raised the threshold default for CIRP to Rs. 1 crore, was retrospective in operation and therefore the application after was not maintainable for want of pecuniary jurisdiction of the tribunal. The issue to be considered by the tribunal was – “Whether the notification under Section 4 of the Code raising the minimum default limit be applicable to the applications pending for admission?”.
The tribunal observed, “it is a well-settled law that a statute is presumed to be prospective unless it is held to be retrospective, either expressly or by necessary implication.” When the amendment to Section 4 of the Code was made, nowhere in the notification it was mentioned that its application will be retrospective. Therefore, the tribunal held that amendment would be considered as prospective and not retrospective in nature. Thus, it admitted the application and initiated the corporate insolvency resolution process against the CD.
Full text of the order accessible here.
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Abbreviations Used Code – Insolvency and Bankruptcy Code, 2016 CIRP – Corporate Insolvency Resolution Process AA – Adjudicating Authority (NCLT) CD – Corporate Debtor FC – Financial Creditor OC – Operational Creditor CoC – Committee of Creditors IRP – Interim Resolution Professional RP – Resolution Professional RA – Resolution Applicant – New Delhi Bench VI […]August 15, 2021