Re: Foseco India Limited v. Om Boseco Rail Products Limited
The applicant Foseco India Limited, filed this application under Sec.9 of the Insolvency and Bankruptcy Code, 2016 (in short IB Code) for initiation of corporate insolvency resolution process against the corporate debtor, viz., Om Boseco Rail Products Limited for the alleged default in payment of operational debt to the tune of Rs.90,00,919.10 (Rupees Ninety lakh nine hundred nineteen and paise ten only).
Contention of the Parties:
“Corporate Debtor Counsel contended that because of the amendment to section 4 of the Code introducing a proviso to Section 4 that “Provided that the Central Government may, by notification, specify the minimum amount of default of higher value which shall not be more than one crore rupees.” is retrospective in operation and therefore this application after the amendment not maintainable for want of pecuniary jurisdiction of this Tribunal as the amount involved in the matter is less than One Crore. According to him similar amendment to section 10(4)(c) was introduced by the Government wherein I hold in the matter of Sleep Well Industries Ltd. cited above that the operation of 10(4)(c) is retrospective and therefore, the operation of the above proviso to section 4 of the Code is to be held as retrospective.”
“Operational Creditor Counsel contended that whether Notification u/ s 4 of the Code raising the minimum default limit be applicable to the applications pending for admission? It is a well-settled law that a statute is presumed to be prospective unless it is held to be retrospective, either expressly or by necessary implication. When the amendment to section 4 of IBC was, inserted a proviso enhancing the pecuniary jurisdiction for filing applications as against small and medium scale industries nowhere in the notification mentioned that its application will be retrospective. Therefore, it appears to me that the amendment shall be considered as prospective and not retrospective. The facts in the cited decisions are not at all similar to the facts in the case in hand and hence not helpful to strengthen the said submission on the side of the CD.”
The NCLT Kolkata bench observed that it is a settled judicial position that the law is presumed to apply on a prospective basis if there is no indication of any retrospective application.
The tribunal admitted the insolvency application, imposed a moratorium, and approved the appointment of an interim resolution professional.