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For determining the minimum threshold of Rs. 1 crore under Section 4 of IBC, the date when the CIRP initiation application is filed is relevant, not the date of giving Demand Notice under Section 8 of IBC – Ralco Extrusion Pvt. Ltd. Vs. Centech Engineers Pvt. Ltd. – NCLT Mumbai Bench

Hon’ble NCLT Mumbai Bench held that:

(i) It is now settled that the threshold limit of Rs.1 crore will be applicable for applications filed under Sections 7, 9 and 10 on or after 24.03.2020, even if the debt in default is on a date earlier than 24.03.2020. Moreover, the threshold of Rs.1 crore has to be fulfilled by an applicant under Section 7 or Section 9 on the date of filing of the application.
(ii) The fact that default was committed prior to 24.03.2020 and the statutory notice under Section 8 was issued and served prior to 24.03.2020 are not determinative or material, although these are conditions precedent for filing an application under Section 9 of the Code. What is relevant for determining the minimum threshold is not the date of giving notice under Section 8 but the date when the application is filed. Thus, Part II of the Code becomes applicable and an operational creditor can initiate CIRP against the corporate debtor w.e.f. 24.03.2020 only when the amount of default is Rs.1 crore or more. No application can be initiated after 24.03.2020 irrespective of the date of default if the minimum threshold of Rs.1 crore is not met.

For determining the minimum threshold of Rs. 1 crore under Section 4 of IBC, the date when the CIRP initiation application is filed is relevant, not the date of giving Demand Notice under Section 8 of IBC – Ralco Extrusion Pvt. Ltd. Vs. Centech Engineers Pvt. Ltd. – NCLT Mumbai Bench Read Post »

Act of mismanagement can be duly taken care under the avoidance provisions contained in IBC, NCLT cannot proceed in Company Petition filed u/s 241 of the Companies Act, 2013 – Mrs. Urmila Bairagra Vs. Bairagra Builders Pvt. Ltd. & Ors. – NCLT Mumbai Bench

NCLT Mumbai Bench, in Company Petition filed u/s 241 of the Companies Act, 2013 held that:
(i) Petition has been filed with the sole ulterior motive of thwarting the imminent action from the Respondent no. 6 or its successor to claim the mortgage over the property of Respondent no. 1. This Tribunal considers it fit and appropriate to impose a costs of Rs. 1,00,000/- on the Petitioner for filing this Petition for the purpose other than relief provided u/s 242 under the garb of act of Oppression or Mismanagement.
(ii) Act of the mismanagement, if there is any, can be duly taken care under the avoidance provisions contained in IBC, and this Bench cannot proceed further against the Corporate Debtor, if the petitioner seeks any relief from it in the petition on account of commencement of moratorium u/s 14 of IBC.

Act of mismanagement can be duly taken care under the avoidance provisions contained in IBC, NCLT cannot proceed in Company Petition filed u/s 241 of the Companies Act, 2013 – Mrs. Urmila Bairagra Vs. Bairagra Builders Pvt. Ltd. & Ors. – NCLT Mumbai Bench Read Post »

Any default committed during the Section 10A period cannot be held to bar CIRP application which is filed on the basis of default prior to Section 10A and subsequent to Section 10A period – Nitin Chandrakant Desai Vs. Edelweiss Asset Reconstruction Ltd. & Anr. – NCLAT New Delhi

NCLAT held that the Adjudicating Authority has noticed and returned a finding that the default recorded in the NESL is 31.01.2020. The default on 31.01.2020 is obviously prior to the Section 10A period. When default has been committed by the Corporate Debtor prior to Section 10A period, any default committed during the Section 10A period can not be held to bar the application which is filed on the basis of default prior to Section 10A and subsequent to Section 10A period. Reading of the Application indicates that default was committed by the Corporate Debtor prior to Section 10A period. We are satisfied that no error has been committed by the Adjudicating Authority in admitting Section 7 Application. There is no merit in the Appeal, the Appeal is dismissed.

Any default committed during the Section 10A period cannot be held to bar CIRP application which is filed on the basis of default prior to Section 10A and subsequent to Section 10A period – Nitin Chandrakant Desai Vs. Edelweiss Asset Reconstruction Ltd. & Anr. – NCLAT New Delhi Read Post »

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