Important judgment on applicability of the threshold default limit of Rs. 1 crore under Section 4 of IBC – Hyline Mediconz Pvt. Ltd. Vs. Anandaloke Medical Centre Pvt. Ltd. – NCLAT New Delhi
In this judgment, NCLAT considered all past judgments and held that if we accept the submission of learned counsel for the Appellant 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. When the legislative scheme indicate that application for CIRP can be filed only after fulfilling the minimum threshold limit applicable w.e.f. 24.03.2020, no other interpretation of Section 4 can be given. When Section 4 empowers the Central Government to specify the minimum amount or higher value upto Rupees One Crore and power under Section 4 proviso has been exercised vide Notification dated 24.03.2020, the legislative intent is clear that threshold of Rupees One Lakh shall not apply henceforth i.e. 24.03.2020 and if initiation be made for an default, it should fulfil the minimum threshold of Rupees One Crore.
