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
The applicant Foseco India Limited, filed this application under Sec.9 of the Insolvency and Bankruptcy Code, 2016 (in short IB Code) for initiation of corporate insolvency resolution process against the corporate debtor, viz., Om Boseco Rail Products Limited for the alleged default in payment of operational debt to the tune of Rs.90,00,919.10 (Rupees Ninety lakh nine hundred nineteen and paise ten only).
2. Brief facts of the case, for our consideration of the application are the following: –
The Operational Creditor is a company engaged inter alia, in the business of manufacturing and supply of chemicals and allied products related to foundry and steel industries, such as, resins, coating for fer ous and non-fer ous foundries, sleeves, fluxes, metal treatment products of foundries. The corporate debtor regularly purchased various foundry and chemicals generally on creditor basis, the credit period being 30 days which was relaxed for another 15 days beyond the usual credit period as mentioned in the invoices. The operational creditor also granted 7 days as transit period forpayment by post dated cheques. However, the corporate debtor failed to make any payment against outstanding debt.
3. It appears from the record that the materials supplied to the corporate debtor were retained and used by the corporate debtor. All these are reflected in the invoices, the details of which are provided in Annexure A annexed with the application. These are as follows:-
