IBC: Retrospective Application of Revised Threshold- An Alternate Perspective
In the wake of the Covid-19 pandemic, to protect the interest of MSMEs, the Central Government had increased the threshold of default under Section 4 of IBC from Rs. 1 lac to Rs. 1 crore. The notification, which was issued on March 24, 2020, did not indicate whether the revised threshold would have any retrospective operation. There is a strong presumption of the prospective application of the notification, especially in view of the fact that, where legislature intended an amendment to have a retrospective effect, such retrospective effect have been specifically provided (See, recent amendment to Section 7 for instance).
But can there be an alternate argument in favour of retrospective application of the revised threshold?
This article has been contributed by Arka Majumdar (Partner).
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