IBC Section 9 application dismissed as debt below minimum threshold of Rs. 1 Crore

Uniwoth Enterprises LLP Vs Starco Metaplast Pvt Ltd (NCLT Delhi)

NCLT Delhi held that alleged debt falls below the minimum threshold limit of Rs. 1 Crore as laid down under section 4 of the Insolvency and Bankruptcy Code, 2016 and hence section 9 application for initiation of CIRP dismissed.

Facts- This instant application was filed by Uniworth Enterprises LLP (‘Applicant’/ ‘Operational Creditor’) under Section 9 of the Insolvency and Bankruptcy Code, 2016 with a prayer to initiate Corporate Insolvency Resolution Process in respect of M/s. Starco Metaplast Private Limited ( ‘Respondent’ or ‘Corporate Debtor’) for defaulting the payment of total amounting to 2,83,84,205/- which comprises of Principal amounting to Rs. 2,32,60,608/- and interest at the rate of 18% Rs. 51,23,597 /- to be paid by the Corporate Debtor.

Conclusion- Held that it becomes evident that there exist disputes and disagreements concerning the alleged outstanding amount claimed by the Applicant/Operational Creditor, which arose prior to the issuance of the statutory demand notice and the filing of the present application, particularly in relation to the invoices raised by the Applicant.

Held that the minimum threshold limit of Rs. 1 Crore as laid down under Section 4 of the Code is the statutory requirement which has to be mandatorily complied with and no person shall be entitled to have the privilege of not complying with the statutory requirements. The threshold limit was increased from Rs. 1 lakh to 1 crore vide notification dated 24.03.2020 and the present application was filed on 18.05.2023. Therefore, the present petition failed to meet the minimum threshold amount of Rs. 1 crore. Hence, the present petition is not maintainable and is liable to be dismissed on this ground alone.