Application u/s. 7 of IBC admissible when default date is prior to section 10A period

Mobile Constructions Private Limited Vs Apple Land Development Private Limited (NCLAT Delhi)

NCLAT Delhi held that application under section 7 of the Insolvency and Bankruptcy Code, 2016 [IBC] admissible since date of default is much prior to section 10A period. Accordingly, appellant cannot be barred u/s. 10A to file proceedings under Section 7.

Facts- This is an Appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016 against the dismissal of the Company Petition by which the Adjudicating Authority has dismissed the Section 7 Petition. The only issue before us is whether the Adjudicating Authority could have calculated a date of default, dehors the agreement between the parties especially when the Respondent chose not to challenge those notices or contest the Petition.

Conclusion- The liability to pay interest had occurred prior to Section 10A period, continues in the 10A period, and also exists beyond the 10A period. Hence, the Appellant cannot be barred under Section 10A to file proceedings under Section 7.

In the present case, date of default has been noted in the NeSL portal on a date which is much prior to Section 10A period. The default, which is much prior to the 10A period, becomes an admitted fact as it is not challenged by the Respondent, since they neither appeared before the Adjudicating Authority nor before this Appellate Tribunal. So, it can be concluded that the default date is much prior to Section 10A period.