Case Law Details
Foseco India Limited Vs Om Boseco Rail Products Limited (NCLT Kolkata)
The issue under consideration is whether increase in threshold by CG through notification for initiating Corporate Insolvency Resolution Process (CIRP) is prospective or retrospective in effect.
In the current case, the applicant filed application under Insolvency and Bankruptcy Code, 2016 (IB Code) for initiation of corporate insolvency resolution process against the corporate debtor for the alleged default in payment of operational debt. In reply against this proceeding Corporate Debtor submitted that CG through notification enhanced the threshold limit from 1 lacs to 1 crore for initiation of CIRP proceedings and this is retrospective in operation and therefore this application after the amendment not maintainable for want of pecuniary jurisdiction of this Tribunal as the amount involved in the matter is less than One Crore. Hence, this application is liable to be dismissed.
NCLT states that it is a well- settled law that a statute is presumed to be prospective unless it is held to be retrospective, either expressly or by necessary implication. When the amendment to section 4 of IBC was, inserted a proviso enhancing the pecuniary jurisdiction for filing applications as against small and medium scale industries nowhere in the notification mentioned that its application will be retrospective. Therefore, the amendment shall be considered as prospective and not retrospective. The facts in the cited decisions are not at all similar to the facts in the case in hand and hence not helpful to strengthen the said submission on the side of the Corporate Debtors. Accordingly, the claim of the operational creditor is found sustainable under the law.
FULL TEXT OF ORDER AND JUDGEMENT OF NATIONAL COMPANY LAW TRIBUNAL
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