The purpose of the notification under Sec. 4 of IBC, increasing limit to Rs. 1 cr. was to ensure that SMEs and MSMEs are not subjected to Insolvency proceedings during the lockdown or immediately thereafter – Pankaj Aggarwal Vs. Union of India And Ors – High Court New Delhi
The Court held that the notification dated 24th March 2020 has changed the `minimum amount of default’ from one lakh rupees to one crore rupees in respect of `Insolvency Resolution and Liquidation for corporate persons’ in Part II of the Code. The proceedings in the present case have been commenced under Section 9 of the IBC which is in Part II of the Code. The purpose of the notification was to ensure that Small and Medium Enterprises viz., SMEs and MSMEs are not subjected to Insolvency proceedings during the lockdown or immediately thereafter. The present writ petition accordingly deserves consideration. Prima facie, this is an error by the NCLT, as the notification dated 24th March 2020 was clearly applicable. Subject to the Petitioner depositing an amount of Rs.10 lakhs with the ld. Registrar General of this Court, the order of the NCLT dated 29th May, 2020 shall remain stayed till the next date of hearing. The deposit shall be made within two weeks. The Company – VMA Enterprises Pvt Ltd. is permitted to carry on its day to day operations. However, the IRP is given liberty to approach this Court in case he deems fit for any further directions.
