Judgment Summaries (NCLT) – Om Boseco Rail Products Ltd.

  December 22, 2021

In the matter of Om Boseco Rail Products Ltd. (Kolkata Bench (20.05.2020))

Facts

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?”. 

Order

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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