Rajesh Sabharwal vs Desein Private Limited

Rajesh Sabharwal ...Appellant

Versus

Desein Pvt. Ltd. ...Respondent

Present:

For Appellant : Mr. Kunal Anand, Mr. Prakhar Dixit, Ms. Tusharika Sharma, Advocates.

For Respondent : Mr. Ankit Shah, Mr. Varun Gupta, Ms. Lakshita Arora, Ms. Simran Wason, Advocates.

ORDER

08.08.2023: Heard Shri Kunal Anand, Learned Counsel appearing for

the Appellant and Shri Ankit Shah, Learned Counsel appearing for the

Respondent.

2. This appeal has been filed against the order and judgement of the

Adjudicating Authority dated 27.04.2021 by which order Adjudicating

Authority has dismissed Section 9 application filed by the Appellant.

3. Appellant gave a notice on 31.01.2020 u/s 8 claiming an amount of Rs.

41,81,024/-. The notice was also replied by the Corporate Debtor on

17.03.2020.

Company Appeal (AT) (Insolvency) No. 773 of 2021 1

4. The Ministry of Corporate Affairs exercising its powers has issued a

notification dated 24.03.2020 by which the minimum threshold amount to

trigger the insolvency was enhanced from Rs. One lakh to Rs. One crore. The

application being CP(IB)36/PB/2021 was filed by the Appellant on

04.08.2021.

5. The Adjudicating Authority heard the application and on the ground

that it does not fulfil the threshold has rejected the application.

6. Learned Counsel, Shri Anand challenging the order contends that since

the Demand Notice was issued on 31.03.2020 prior to notification dated

24.03.2020, the threshold of the case ought to have Rs. One lakh only and

the notification dated 24.03.2020 is not applicable in the facts of the present

case. He further submits that the Supreme Court is already considering the

issue in Civil Appeal No. 7032/2021, the Jumbo Paper Products Vs. Hansraj

Agrofresh Pvt. Ltd.

7. Learned Counsel for Respondent refuting the submission submits that

the relevant date for examining the threshold is the date when the application

was filed. He submits that the issue has been considered and decided by this

Tribunal in Hyline Mediconz Pvt. Ltd.Vs. Anandaloke Medical Centre

Pvt. Ltd. in Comp. App.(AT) Ins. No. 1036/2022 and several other

judgements of this Tribunal. He submits that date of giving notice u/s 8 is

not relevant for determining the threshold.

8. We have considered the submission of the Learned Counsel for the

parties and peruse the records.

Company Appeal (AT) (Insolvency) No. 773 of 2021 2

9. There is no dispute between the parties regarding the relevant dates i.e.

the date of issue of Demand Notice i.e. 31.01.2020 and the date on which the

application was filed i.e. 04.08.2020. The application u/s 9 has been filed on

04.08.2020 which is undisputed fact. The similar issue came for

consideration in Comp. App. (AT)(Ins.) No. 1036/2022 where Demand Notice

was issued on 05.03.2020 and section 8 application was filed subsequently

on 18.01.2021. Arguments was addressed that since the Operational

Creditor has served the Demand Notice, the application filed on 18.01.2021

was maintainable on the threshold of Rs. One lakh.

10. This Tribunal elaborately considered the submission of the Learned

Counsel for the parties and laid down the following in paragraph 8 and 9:-

"8. Section 4(1) provides that "this Part shall

apply to matters relating to the insolvency and

liquidation of corporate debtors where the

minimum amount of the default is one lakh

rupees". Part II of the Code deals with

'Insolvency Resolution and Liquidation for

Corporate Persons'. The applicability of the

Part II is dependent on minimum amount of

default as prescribed in Section 4(1). Minimum

amount to default was Rupees One Lakh which

has been subsequently amended to Rupees

One Crore by Notification dated 24.03.2020.

Company Appeal (AT) (Insolvency) No. 773 of 2021 3 The applicability of Part II is dependent on

minimum amount of default thus.

9. Section 6 of the Code provides for persons

who may initiate Corporate Insolvency

Resolution Process (CIRP). Section 6 is as

follows:-

"6. Persons who may initiate corporate

insolvency resolution process. - Where any

corporate debtor commits a default, a financial

creditor, an operational creditor or the

corporate debtor itself may initiate corporate

insolvency resolution process in respect of such

corporate debtor in the manner as provided

under this Chapter."

11. The above judgement fully covers the issues raised in this appeal. The

application of the Appellant having been filed on 04.08.2020 i.e. subsequent

to 24.03.2020 should fulfil the threshold of Rs. One crore and the

Adjudicating Authority did not commit any error in rejecting Section 9

application.

We do not find any merit in the Appeal, the Appeal is dismissed.

Company Appeal (AT) (Insolvency) No. 773 of 2021 4

12. We, however, observe that dismissal of Section 9 application shall not

preclude the Appellant to take such remedy as available in law.

[Justice Ashok Bhushan] Chairperson

[Mr. Barun Mitra] Member (Technical)

ss/nn

Company Appeal (AT) (Insolvency) No. 773 of 2021 5