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Registrar of the NCLT cannot decide upon applicability of notification increasing the IBC threshold in cases: Delhi High Court

The Registrar of the NCLT being in the administrative capacity cannot decide on the jurisdiction of NCLT in hearing a case based on the pecuniary threshold. The issue has arisen after the 24th March 2020, Notification in which the pecuniary threshold under the Insolvency & Bankruptcy Code, 2016, was increased from Rs. 1 Lakh to Rs. 1 crore. The Delhi High Court presided over by J. P.M. Singh, laid down this ratio in the case of Skilltech Services Pvt. Ltd. Vs. Registrar, NCLT, New Delhi & Anr., [W.P. (C) 474/2021].

The Petitioner in this case had filed a petition under this court stating that he had filed a Section 9 petition under IBC, before the appropriate bench of the NCLT. It was the petitioner’s grievance that the Registrar of the NCLT did not list the matter before the appropriate bench on the ground that the threshold of the pecuniary jurisdiction of the NCLT had been increased from Rs. 1 lakh to Rs. 1 crore.

The Counsel for the Petitioner submitted that the appropriate NCLT bench has the power and jurisdiction under the IBC to decide upon the pecuniary threshold of a case and the same could not be decided by the Registrar. Further reference was made to the NCLT Kochi order where it was stated that if disputes had arisen prior to the outbreak of the Covid-19 pandemic, the notification would not apply as this would not be made applicable retrospectively.

The Court carefully analyzed the submissions made by the parties and was of the opinion that it was for the appropriate bench of the NCLT to judicially determine the issue and decide whether notice was liable to be issued in the matter or not. The Court stated that, “This court is of the opinion that the question as to whether the NCLT has jurisdiction to entertain a particular case or not cannot be determined by the Registrar in the administrative capacity. The Registrar would have to place the matter before the appropriate bench of the NCLT, for the said question to be judicially determined. The appropriate bench of the NCLT would have to then, take a considered view as to whether notice is liable to be issued in the matter or not.”

The Court further added that, “The question as to whether the notification dated 24th March, 2020 applies to a particular petition that has been filed prior to the said notification or not is also a question to be determined by the Bench of the NCLT and not by the Registrar of the Tribunal.”

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