V- Con Integarted Solutions Pvt. Ltd vs Argos Technology Resources Pvt. Ltd

V-Con Integrated Solutions Pvt. Ltd. ...Appellant

Versus

Argos Technology Resources Pvt Ltd. ...Respondent

Present: For Appellant: Appearance not marked. For Respondent: Ms. Palhv M. Advocate for R-1

ORDER

08.08.2022: Heard Learned Counsel for the Appellant.

2. This Appeal has been filed against the Order dated 26th April, 2022 by

which Order the Application filed by the Appellant under Section 9 of the

Insolvency and Bankruptcy Code, 2016 has been dismissed on the ground

that it does not fulfil the threshold as provided in Section 4 of the Code.

3. The Application under Section 9 was filed by the Appellant on 27th

March, 2021 for an amount of Rs. 20, 27, 659/- which application has been

rejected by the Adjudicating Authority.

4. Learned Counsel for the Appellant submits that since the default in the

present case was committed prior to 24th March, 2020 hence the notification

dated 24th March, 2020 is not applicable in the present case and the

Application ought to have been admitted. In support of his submissions, he

has placed reliance on a Judgment of this Tribunal in the matter of -2-

"Madhusudan Tantia Vs. Amit Choraria & Anr.", (2020) SCC OnLine NCLAT

713.

5. We have considered the submissions of Learned Counsel for the parties

and perused the record.

6. Section 4 of the Code provided initially threshold of Rs. 1 Lakh which

was substituted vide Notification dated 24th March, 2020 to 1 Crore. The

Submissions which has been pressed by the Learned Counsel for the Appellant

is that the notification being prospective as has been held by this Tribunal in

"Madhusudan Tantia" (supra) it should not apply on the default which had

occurred prior to 24th March, 2020. We have perused the Judgment of this

Tribunal in "Madhusudan Tantia". In the above case, the Application under

Section 9 was filed prior to 24th March, 2020 which fact is noticed in paragraph

5 of the Judgement. Emphasis has been laid by Learned Counsel of the

Appellant in paragraphs 56 and 57 which are to the following effect:

"56. As far as the present case is concerned, this Tribunal, after carefully and with great circumspection, ongoing through the contents of the notification dated 24.03.2020 issued by the Ministry of Corporate Affairs, Government of India, whereby and whereunder the minimum amount of default limit was specified as Rs. one crore (obviously raising the minimum amount from Rs. one lakh to one crore) unerringly comes to a definite conclusion that the said notification is only 'Prospective in nature' and not a 'retrospective' one because of the simple reason the

Company Appeal (AT) (Insolvency) No. 910/2022 -3-

said notification does not in express term speaks about the applicability of 'retrospective' or 'retroactive' operation. Suffice it for this Tribunal to point out that from the tenor, spirit and the plain words employed in the notification dated 24.03.2020 of the Ministry of Corporate Affairs, Government of India, one cannot infer an intention to take or make it retrospective as in this regard, the relevant words are conspicuously absent and besides there being no implicit inference to be drawn for such a construction in the context in issue. That apart, if the notification dated 24.03.2020 of the Ministry of Corporate Affairs, Government of India, is made applicable to the pending applications of IBC (filed earlier to the notification in issue) it will create absurd results of wider implications / complications.

57. In view of the upshot and also this Tribunal, on a careful consideration of respective contentions advanced on either side and considering the facts and circumstances of the instant case in a conspectus fashion holds unhesitatingly that the notification dated 24.03.2020 of the Ministry of Corporate Affairs, Government of India, is prospective in nature and it is not retrospective or retroactive in nature. Further, the said notification will not apply to the pending applications filed before the concerned 'Adjudicating Authority' (Authorities), under IBC (waiting for admission), prior to the issuance of the aforesaid notification, as opined by this Tribunal. Viewed in the above prospectives, the conclusion arrived at by the 'Adjudicating Authority' in the impugned order to the

Company Appeal (AT) (Insolvency) No. 910/2022 -4-

effect that the notification dated 24.03.2020 of the Ministry of Corporate Affairs, Government of India, shall be considered as prospective and not retrospective and the finding that there was no payment on the side of 'Corporate Debtor' after receipt of Demand Notice, no pre-existing dispute also alleged or proved and ultimately admitting the application filed by the 2nd Respondent / Operational Creditor are free from legal infirmities. Resultantly, the instant Appeal fails."

7. When we read paragraphs 56 and 57, it is clear that this Tribunal

categorically held that Notification dated 24th March, 2020 is only prospective

and not a retrospective. This Tribunal held that the said notification will not

apply to pending application of IBC. It is clear that Applications under Section

9 filed prior to 24th March, 2020 shall not be affected by the Notification dated

24th March, 2020 and notification being prospective shall apply to Applications

filed thereafter. The provision is clear that the amendment shall come into

force after its publication in the Gazette and Application filed thereafter has to

fulfil the threshold as provided in Section 4 i.e. threshold of Rs. 1 Crore. In

the present case, the Judgment relied by Learned Counsel for the Appellant

does not contain any ratio that in event the default has been committed prior

to 24th March, 2020 and Application is filed thereafter the same shall be

governed by the unamended provision of Section 4 of the Code.

8. The Application in the Appellant's case filed on 27th March, 2021 was

rightly hit by threshold of Rs. 1 Crore as implemented with effect from 24th

Company Appeal (AT) (Insolvency) No. 910/2022 -5-

March, 2020. There is no error in the Order of the Adjudicating Authority, the

Appeal is dismissed.

[Justice Ashok Bhushan] Chairperson

[Mr. Barun Mitra] Member (Technical)

Basant/nn

Company Appeal (AT) (Insolvency) No. 910/2022