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Judgment
O R D E R
05.03.2024 This appeal is directed against the order dated 10.11.2022 by which application filed by the Appellant as an Operational Creditor has been dismissed on the ground that he does not meet the threshold as provided in Section 4 of the Insolvency & Bankruptcy Code, 2016 (in short ‘Code’). In brief the Appellant has filed the application on the prescribed form for the total amount of debt of Rs. 1,22,22,500/-.
It is alleged that in part 4 of the application that as per the invoices, the outstanding amount which is sought to be resolved is Rs. 99,77,551/- and the rest of the amount is the competent of interest.
The application was contested by the Respondent herein by filing the Reply in which one of the issue was raised that the application does not meet the threshold as prescribed under Section 4 of the Code.
The Tribunal found that the principal amount claimed by the Appellant is Rs. Rs. 99,77,551/-, whereas the minimum amount of threshold is Rs. 1,22,22,500/-. Therefore, the Tribunal has no pecuniary jurisdiction to entertain the application filed under Section 9 by the Appellant.
Counsel for the Appellant has referred to a decision of this Court rendered in the case of Prashant Agarwal Vs. Vikash Parasrampria & Ors., Company Appeal (AT) (Ins.) No. 690 of 2022 decided on 15.07.2022. In which it has been held that the interest of competent has also to be taken into consideration at the time of deciding about the threshold to invoke the pecuniary jurisdiction. However, to be fair with the court, he has submitted that in that case interest was provided in the invoices, whereas in the present case there is no provision of interest in the invoices raised by the Appellant.
He has otherwise submitted that the Respondent had issued the cheque of an amount of Rs. 99,77,551/- on 05.03.2020 which was dishonoured because the payment was stopped by the drawer.
He has referred to Section 80 of the Negotiable Instruments Act, 1981 to content that even if there is no agreement between the parties in regard to the payment of interest on a instrument yet the interest has to be calculated @ 18% per annum from the date on which the same ought to have been paid and the party shall charge the interest until the principal amount is tendered or released.
On the other hand, Counsel for the Respondent has submitted that Section 80 of the Negotiable Instruments Act, 1981 is not applicable, as it relates to recovery proceedings. He has also submitted that even otherwise the cheque dated 05.03.2020 was towards security and not towards discharge of liability.
All these arguments have been placed before us and it appears that these were not placed before the Tribunal.
In such circumstances, we are of the considered opinion that it would be just expedient if the Impugned Order is set aside as no effective order on merit has been passed except that the application filed by the Appellant has been dismissed on threshold for the lack of pecuniary jurisdiction and the parties are relegated back to the Tribunal where they would raise all these issues, which are raised before us and the Tribunal shall decide the same in accordance with law.
Accordingly, the Impugned Order is hereby set aside, the matter is remanded back to the Tribunal.
The parties are directed to appear before the Tribunal on 20th March, 2024.
The application bearing C.P. (IB)-853(MB)/2021 is restored. It is made clear that we have not made any observations on the merits of this case and all the issues have been kept open in respect of decision of the threshold.