# In the matter of Galaxy Machinery Pvt. Ltd. CP (IB) No. 51-BB-2022

> NCLT judgment dated 2022-04-04. Citation: TCN-2022-NCLT-03411. The case involves M/s. Kitagawa India Pvt Ltd (Petitioner) filing a Corporate Insolvency…

- **Court:** NCLT
- **Order date:** 4 Apr 2022
- **Citation:** TCN-2022-NCLT-03411
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/galaxy-machinery-pvt-ltd-cp-ib-no-51-bb-2022-02befa93

## Summary

### Background

The case involves M/s. Kitagawa India Pvt Ltd (Petitioner) filing a Corporate Insolvency Resolution Process (CIRP) application against M/s. Galaxy Machinery Pvt Ltd (Respondent) under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016. The application was filed as CP (IB) No. 51/BB/2022 before the National Company Law Tribunal (NCLT), Bengaluru Bench. The debt claimed in the application is Rs. 33,08,318, which is less than the revised threshold of Rs. 1 Crore as per the amendment to Section 4 of the IBC, 2016, effective from March 24, 2020.

## Facts

M/s. Kitagawa India Pvt Ltd filed a Corporate Insolvency Resolution Process (CIRP) application (CP (IB) No. 51/BB/2022) against M/s. Galaxy Machinery Pvt Ltd under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016. The claimed debt amount is Rs. 33,08,318, which is less than Rs. 1 Crore. The application was filed on November 2, 2021, after the amendment to Section 4 of the IBC, 2016, which raised the minimum threshold for initiating CIRP to Rs. 1 Crore, effective from March 24, 2020. The NCLAT, in Jumbo Paper Products Vs. Hansraj Agrofresh Pvt Ltd., clarified that the increased threshold applies to applications filed on or after March 24, 2020, irrespective of the debt's origination date. This clarification is crucial because it determines whether the

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## Issues and analysis

### Issue 1: Whether the Corporate Insolvency Resolution Process (CIRP) application filed by M/s. Kitagawa India …

**Ratio:** The ratio is that the amended Section 4 of the IBC, 2016, which raised the minimum

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**Reasoning:** The court reasoned that the amendment to Section 4 of the IBC, 2016, is clear in its

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**Interpretation:** The interpretation of Section 4 of the IBC, 2016, as amended, is that the

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**Application:** In this case, the debt amount was Rs. 33,08,318, which is less than Rs. 1

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## Parties

- **Judges:** SH. AJAY KUMAR…; SH. MANOJ KUMAR…
- **Appellants:** M/s. Kitagawa…
- **Respondents:** M/s. Galaxy…
- **Advocates:** Sh. Pramod Kumar…; Sh. Nikhil…

## Timeline

- **2020-03-24 — Amendment to Section 4…**: The amendment to Section 4 of the IBC, 2016, came into force, raising the minimum…
- **2021-10-04 — NCLAT Observation in Jumbo Paper Products Vs.…**: The NCLAT clarified that the increased threshold applies to applications filed on or…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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