27/09/2022

Existence of default is undoubtedly a condition to be fulfilled for initiating Section 9 Application but the default alone is not the condition which entitles the Operational Creditor to initiate Section 9 proceeding after 24.03.2020 on default of Rs. 1 Lac – M/s. Netfinity Solutions Vs. M/s. Karvy DigiKonnect Ltd. – NCLAT New Delhi

NCAT held that Adjudicating Authority did not lack jurisdiction to revive the Company Petition and the observations of the Adjudicating Authority in the Impugned Order in so far as it held that there is no enabling provision in the Code to revive the Application is erroneous.
On the matter of threshold, NCLAT held that This Tribunal in large number of cases have held that even if default was committed prior to 24.03.2020 and Application is filed under Section 9 after 24th March, 2020, it has to fulfill the threshold of Rs. 1 Crore. It also held that the threshold in Section 4 is entirely different from the protection given under Section 10 A hence Section 10-A has no relevance with regard to interpreting requirement of Section 4.

Existence of default is undoubtedly a condition to be fulfilled for initiating Section 9 Application but the default alone is not the condition which entitles the Operational Creditor to initiate Section 9 proceeding after 24.03.2020 on default of Rs. 1 Lac – M/s. Netfinity Solutions Vs. M/s. Karvy DigiKonnect Ltd. – NCLAT New Delhi Read Post »

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