IBC Digest-By AVM Resolution Professionals LLP.

IBC Digest-By AVM Resolution Professionals LLP.

1. Whether a CIRP process can be initiated against the company whose name is struck off the register of RoC.

In the matter of Deepika Surana Vs. V.K. Aggarwal & Company Pvt. Ltd. the NCLT, New Delhi decided whether a proceeding under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC/Code) for initiation of Corporate Insolvency Resolution to the Corporate Debtor, therefore the Corporate Debtor is under an obligation to make payment of its dues.

Therefore, NCLT held that the Corporate Debtor, cannot be considered as dissolved for the purpose of realizing its unpaid dues through the present proceedings. Further, prior to the enactment of IBC 2016, when Section 271(a) and Section 433(e) of the Companies Act 1956 i.e., ground to wound up the Company on being unable to pay its debts, were in vogue, the Legislature had allowed the struck off Company to be wound up by virtue of Section 248(8) of Companies Act 2013.

That applying the same principal for the IBC Proceedings and in the light of the Section 250 of Companies Act 2013 & the Judgement of Hon’ble NCLAT passed in the matter of Mr. Hemang Phophalia Vs. The Greater Bombay Co-Operative Bank Limited & Ors. we are of the considered opinion that the present Application filed against the Struck off Company is maintainable.

2.Interest cannot be clubbed with principal amount to ascertain the minimum required operational debt.

In the matter of CBRE South Asia Pvt. Ltd. Vs. M/s. United Concepts and Solutions Pvt. Ltd., the NCLT New Delhi bench decided whether the principal amount and the interest can be clubbed together to reach the requisite default to file an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC/Code).

In the instant case an application is preferred under Section 9 of the Code for initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor (CD). While perusing the application submitted by the applicant NCLT noted that under Part IV of the application the applicant has claimed a total amount of Rs.1,39,84,400/- as Operational Debt, out of which Rs.88,50,886/- only is the Principal amount and the remaining Rs.51,33,514/- is the interest component.

Since the principal outstanding claimed by the Operational Creditor is less than Rs. 1 Crore, a query to the Applicant was raised by this Bench as to whether the Principal and Interest amounts can be clubbed together to reach the minimum threshold of Rs. 1 Crore as stipulated under Section 4 of IBC, 2016.

It is imperative to reproduce the definition of ‘Operational Debt’ as mentioned under Section 5(21). Operational debt means “a claim in respect of the provision of goods or services including employment or a debt in respect of the [payment] of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority;”

On the perusal of the definition provided under the Code, the NCLT stated that that since the Principal amount of operational debt claimed by the Applicant is less than Rs.01 Crore and the Application is filed in the year 2021, the Application is not maintainable under Section 4 of IBC, 2016 and is accordingly, dismissed.

About AVM- Insolvency Professionals LLP

AVM- Insolvency Professionals LLP is a registered Insolvency Professional Entity (IPE) by The Insolvency and Bankruptcy Board of India (IBBI).(Registration number:IBBI/IPE/0099) ( The partners of IPE are Registered Insolvency Professionals (IP) under Insolvency and Bankruptcy Code, 2016 (IBC) having expertise and rich experience to advise on / carry out all aspects of Insolvency Resolution, Restructuring, Bankruptcy & Liquidation.

Contract Details:

Related Stories

No stories found.