National Company Law Appellate Tribunal, New Delhi: A division bench comprising of Ashok Bhushan, J. and Barun Mitra (Technical Member) held that for finding out threshold limit both amount Principal and Interest has to be computed.
In the instant matter, the appellants preferred an application under S. 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) claiming a total debt of Rs. 1,33,68,915/- including interest. The Adjudicating Authority vide order dated 23-11-2022 rejected appellants’ S. 7 application on the grounds that it does not fulfil the threshold limit of Rs.1 Crore. Aggrieved by the impugned order passed by the Adjudicating Authority, the appellants preferred an appeal before the NCLAT challenging the same.
The appellants contended that the Adjudicating Authority only referred to principal amount and failed to consider amount of interest as contemplated in contemplated and held that S. 7 application does not fulfil the threshold.
The NCLAT observed that the amount of Principal and Interest added is Rs. 1.33 Crore, which is beyond the minimum threshold, required. The NCLAT further observed that when the Deed of Guarantee mentions the interest on default, then for finding out threshold both amount Principal and Interest has to be computed.
While not expressing any opinion on the merits of the case, the NCLAT set aside the impugned order passed by the Adjudicating Authority and held that the Adjudicating Authority has committed error in rejecting the application under S. 7 for not fulfilling threshold under S. 4 IBC.
NCLAT remits the matter to the Adjudicating Authority to hear S. 7 application afresh.
[Netafirm Agricultural Financing Agency (P) Ltd. v. Baliraja Sakhar Karkhana Ltd., Company Appeal (AT) (Insolvency) No. 408 of 2023, order dated 03-05-2023]
Advocates who appeared in this case :
Mr. Gaurav Mitra, Mr. Siddharth S. Chapalgaonkar, Mr. Adit Singh, Mr. Sameer Walimbe and Mr. Vishal Kamble, Counsel for the Appellants;
Mr. Prakhar Tandon and Mr. Prashant Trivedi, Counsel for the Respondents.