Delhi High Court issues notice in plea challenging refusal by NCLT to list insolvency plea

The Delhi High Court today issued notice in a petition challenging National Company Law Tribunal's refusal to list an insolvency plea on the ground of the default being less than Rs 1 crore. (Flight Lieutenant Rupa R Gaur vs Registrar NCLT, Delhi & Ors).The matter was listed before a Single Judge Bench of Justice Navin Chawla. .Counsel for the Petitioner, Advocate Anuj informed the Court that his client had issued a demand notice on March 2, 2020 under Section 8 of the Insolvency & Bankruptcy Code. .Therafter, on March 24, the Central Government amended Section 4 IBC and increased the minimum default threshold to Rs 1 crore for the purposes of initiating action under IBC. .Threshold of default under Section 4, IBC for initiation of insolvency proceedings raised to Rs 1 crore [Read Notification].It was finally in September 2020 that the Petitioner finally preferred an insolvency plea under Section 9 IBC against the Corporate Debtor. .It was the Petitioner's grievance that the registry raised an objection and refused to list the matter for hearing on the ground that the default amount was below Rs 1 crore. .Arguing before the High Court, the counsel for the Petitioner admitted that although the default amount was less than Rs 1 crore, the amendment would not apply to his case as the demand notice was issued before March 24. .He contended that the National Company Law Appellate Tribunal had already clarifed that the amendment was prospective in nature and thus, the registry could not have refused to list the matter for hearing. .Notification increasing minimum default amount to Rs 1 crore under IBC prospective in nature: NCLAT.On hearing the counsel, the Court remarked that the registry was empowered to check for requisite jurisdiction on the date of filing and explained that if a party filed a suit valued at Rs 5 lakh, the registry of the High Court would outrightly reject it. .The counsel replied, ."Registry on the administrative side cannot see that..It is not a simplicitor pecuniary jurisdiction.".The counsel argued that for the purposes of a plea under Section 9, a right to file an IBC plea accrued in a party within ten days from the date of delivery of the demand notice to the Corporate Debtor. .Since this right accrued to the Petitioner before the threshold was increased from Rs 1 lakh to Rs 1 crore, the counsel for the Petitioner submitted that his insolvency plea should at least be placed before the NCLT Bench. ."My limited prayer is that the registry may put it (before the NCLT Bench).. I should be heard on the judicial side.".The Court ultimately issued notice in the plea and sought assistance from counsel for the Central Government, Advocate Rajesh Gogna. .Get some more judgements, the Court said. .The matter would be heard next on January 25.