The National Company Law Appellate Tribunal on May 2 stayed the order of the National Company Law Tribunal (NCLT) by which insolvency proceedings had been initiated against Logix City Developers Private Limited.
The appeal against the NCLT order was filed by homebuyers of Logix Blossom Zest, a project located in Noida.After hearing the arguments, NCLAT stayed the NCLT order.
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“Learned Counsel for the Appellant submits that Application under Section 9 of the I&B Code, 2016 filed by the Operational Creditor was both barred by Section 10A of the Code as well as barred due to non-compliance of threshold of Rs. 1 crore.
“It is submitted that the amount claimed being of March, 2020, it was clearly hit by Section 10 A of the Code and those two invoices could not be added hence it falls short of the threshold. Submissions need scrutiny,” the NCLAT order stated. The appeal has been listed for July 6, 2022.
“In the meantime, the Order dated 22nd March, 2022 impugned in this Appeal shall remain stayed,” said the order issued by Justice Ashok Bhushan, the chairperson.
Under Section 10A, if a party defaulted in clearing its debt following the COVID-19 pandemic, after March 25, 2020, insolvency cannot be initiated for such default. The government introduced this to give relief to businesses.
“We submitted before the honourable NCLAT that the petition filed by Colliers is barred by both Section 4 and Section 10A of the Insolvency and Bankruptcy Code, as the amount claimed by Colliers is less than Rs 1 crore and the payment to Colliers became due after the COVID-19 pandemic. Therefore, the insolvency process cannot be initiated on Colliers’ application. Pleased that the honourable NCLAT took note of our submissions and stayed the order of NCLT,” he said.
