Sandip Narendrakumar Patel Vs Svakarma Finance Pvt. Ltd. & Anr. (NCLAT Delhi)
NCLAT Delhi held that provisions of section 10A of the Insolvency and Bankruptcy Code, 2016 would not apply as the date of default occurred much prior to 25.03.2020. Accordingly, held that application filed under section 7 duly accepted.
Facts- The Appellant is the Promotor/Director of Yours Ethnic Foods Pvt. Ltd. (Corporate Debtor) has assailed the validity of the order dated 09.10.2023, passed by the National Company Law Tribunal, Ahmedabad, admitting CP (IB) No. 322/NCLT/AHM/2022, filed under Section 7 of the Insolvency and Bankruptcy Code, 2016. The appellant has mainly contested that application filed u/s. 7 is hit by section 10A of the Code.
The only issue involved in this appeal is as to whether the recall notice dated 06.11.2020 by which a period of 15 days was given to the CD to pay off the defaulted amount has to be considered to be the date of default as 21.11.2020 to hold that the application filed under Section 7 is hit by Section 10A of the Code?
Conclusion- The CD cannot be permitted to take advantage of the fact that the FC had issued a notice of recall dated 06.11.2020, giving 15 days time, to the CD to pay the same and to calculate the date of default as 21.11.2020 which falls within the cut off period of Section 10A because issuance of recall notice, in pursuance of the clause 10.3 of the agreement, was on the occurrence of any of the events of default, which had already occurred in the month of January or at the most February. It does not mean that the default has occurred with the issuance of recall notice as the notice was a consequence of the occurrence of default and it was a procedural step for recalling of the entire loan amount.
