M/s. Asset Reconstruction Company (India) Ltd. vs M/s. Manyata Developers Pvt. Ltd.

Per: Manoj Kumar Dubey, Member (Technical)

The instant Petition has been filed on 26.05.2022 u/s 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter as ‘IBC / Code’) r/w Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 by M/s. Asset Reconstruction Company (India) Limited (hereinafter as ‘Petitioner / Financial Creditor’) through its authorised representative Mr.Rajeev Chhabra with a prayer to initiate the Corporate Insolvency Resolution Process (CIRP) in respect of M/s. Manyata Developers Pvt. Ltd. (hereinafter as ‘Respondent / Corporate Debtor’) for defaulting an amount of Rs.10,85,79,39,222/- due and payable by the Corporate Debtor as on 15.04.2022, inclusive of overdue interest.

The Corporate Debtor – M/s. Manyata Developers Pvt. Ltd. is a Private Limited Company incorporated on 25.07.2008 under the Companies Act, 1956 bearing CIN: U45201KA2008PTC047296 with its registered office situated at Bengaluru. Hence, the jurisdiction lies with this Adjudicating Authority. Its Authorised Share Capital is Rs.65,00,00,000/- (Rupees Sixty Five Crores Only) and Paid-up Share Capital is Rs.65,00,00,000/- (Rupees Sixty Five Crores Only).

Brief facts of the case as stated by the Petitioner are as under:

Pursuant to the issue of notice, Respondent filed its statement of objections vide Diary No.4738 dated 04.11.2022 by inter alia contending as under:

In response to the above, the Petitioner filed Rejoinder vide Diary No.5296 dated 07.12.2022, by inter alia further stating as under:

Vide Additional Rejoinder dt.22.02.2023, the FC stated that under Article 14 of the Loan Agreements it has exercised its rights, pursuant to Default Intimation cum Demand Notice dt.27.10.2021 and called upon the CD to pay a sum of Rs.1022,37,10,315/-. Even this notice date has occurred after the suspension period contemplated u/s 10A. It is contended that as per this notice dated 27.10.2021; the FC called upon the CD to pay the above mentioned sum within 7 days i.e., by 05.11.2021; and due to non-fulfilment of the same, this date of 05.11.2021 can also be considered as ‘Date of Default’ as an alternative. So it is averred by the FC that the ‘Date of Default’ occurred both prior to and post the period of suspension u/s 10A of IBC. It is further stated that it is settled law that there is no presumption that the date of declaration of the loan account as NPA becomes the date of default to enable the FC to initiate action u/s 7 of IBC. The NeSL reports merely states that for the purposes of the generation of these reports, the date of NPA has been taken as the date of default. The purpose of NeSL reports and Information Utilities is merely to record that the CD has committed a default, and not when the default took place. The CD has admitted to its liability in its financial statement as on 29.11.2021 and that the entire loan is disclosed as repayable on demand. In the Synopsis filed vide Diary No.1611 dated 21.03.2023, the FC further stated that Sec. 7(3)(a) makes it clear that the FC need not rely only on the RoD recorded with the I.U. As per Regulations 2-A and 8 of the IBBI (CIRP) Regulations, 2016, the FC can rely other documents to evidence the existence of the debt.

The Petitioner/Applicant has emphasised that the default has occurred prior to the cut-off date i.e. 25.03.2020, for which, reliance has been placed on the correspondence between the Lender and the CD dated 03.06.2019 and some other correspondences in January / February 2020. Further, it has been stated as under:

It is further stated that even assuming the Date of Default as 15.03.2021 in accordance with the report of the NeSL, it does not extinguish the ability or right of the Financial Creditor to proceed against the Corporate Debtor for the amounts which are due and outstanding against the Loan Agreements. The Applicant has also argued against the date of declaration of the Loan as NPA as the Date of Default stating that the expression ‘default’ in terms of Section 3(12) of the IBC, 2016 was very wide and included non-payment of any part of the debt also. The Financial Creditor has also contested the argument regarding the initial moratorium period of 48 or 60 months as well as the subsequent moratorium.

Vide Diary No. 4365 dated 23.08.2023, the FC has enclosed the statement of accounts of the CD for the period of 2018 to 2021, as Annexure-B. Again, vide Diary No.4654 dated 07.09.2023 the FC inter alia has further stated that after the assignment of Loans, the CD continued to default in payment of interest and outstanding due as on that date. The moratorium period which was granted in view of the Covid-19 RBI Circular would only imply that the interest instalments during such period would continue to accrue but not become due and payable through this period. These interest amounts would be charged to the loans as if the same is disbursed to the CD. Pursuant to issuance of Demand Notice dated 27.10.2021 by FC, the right to file this Application arose on expiry of 7 days i.e. 05.11.2021 and this date can also be considered as the ‘Date of Default’.

In support of its submissions, the Financial Creditor has relied upon the following decisions vide Diary No.1613 dated 21.03.2023:

The Corporate Debtor vide Diary No.2273 dt.25.04.2023 has filed a Synopsis and further contended that as per the application filed by the alleged FC u/s 7 of the Code, the date of default in relation to Loan Facilities availed by the CD has categorically been mentioned to be 15.12.2020, and accordingly this application ought to be dismissed in view of Sec.10A of the Code and the law settled by the Hon’ble Apex Court in the case of Ramesh Kymal (supra). It is argued that no default occurred on the date claimed by the Financial Creditor, considering the initial moratoriums for the repayment of the Loans for a period of 48 or 60 months; and the moratorium imposed during 2020 in accordance with RBI Regulatory Package and Guidelines dated 20.03.2020. Further, it is contended that the purpose of initiating CIRP against a CD is to facilitate a financially unsound company to restructure its assets or liquidate its assets in order to pay liabilities of the Creditors wherein the debts are due, admitted and acknowledged by the CD and to sustain the corporate entity. It is settled law that the provisions of the Code never intended to serve the purpose of a debt recovery mechanism, which has been clearly laid down by the Hon’ble Apex Court in a catena of Judgments including in Transmission Corporation (supra).

Various orders placed on record by the Ld. Counsels for the Parties vide Diary dated 23.05.2023, 16.06.2023 and 22.08.2023 are taken on record.

Heard Shri Sharan Kukreja, Ld. Counsel for the Petitioner and Shri E. Om Prakash, Ld. Sr. Counsel for the Respondent and perused the pleadings.

It is seen that the instant Petition has been filed by the Financial Creditor M/s. Asset Reconstruction Company (India) Limited seeking to initiate CIRP against the Corporate Debtor – M/s. Manyata Developers Private Limited for defaulting to pay the outstanding debt of Rs.838,36,62,097/- towards the Principal amount and Rs.247,42,77,124/- towards the overdue interest aggregating the total amount in default of Rs.1085,79,39,222/- (Rupees One Thousand Eighty Crore Seventy Nine Lakh Thirty Nine Thousand and Two Hundred and Twenty Two Only) as on 15.04.2022 as shown in Part-IV of Form-1 of the Petition. This Petition has been filed by the Financial Creditor u/s 7 of the Code on 25.05.2022, which is within the limitation period, considering the date of default mentioned in Part-IV of Form No.1.

As seen from the Petition, the Corporate Debtor had approached L&T Finance Ltd. (‘LTFL’), L&T Housing Finance Limited (‘LTHFL’) and L&T Infrastructure Finance Company Limited (‘LTIFCL’) (hereinafter as ‘Lenders’) seeking to avail certain Loan facilities as narrated in Part-IV of the Form-1 of CP. On failure to fulfil its obligations as stipulated under the Loan Agreements, the LTHFL vide letter dated 03.06.2019 intimated the Corporate Debtor regarding the non-compliance of various covenants and called upon the Corporate Debtor to provide an explanation within 5 days from the date of receipt, failing which, it shall be construed as an Event of Default, under the Loan Agreements. The Corporate Debtor vide letter dated 10.06.2019 has addressed the instances referred to in the aforesaid intimation letter.

It is seen that on 24.01.2020, two default intimation notices were issued by LTFL to the Corporate Debtor with respect to the facilities amounting to Rs.470 Crores and Rs.170 Crores respectively. Further, on the same date, LTIFCL intimated the Corporate Debtor about further defaults vide default intimation notice with respect to the facility amounting to Rs.300 Crores. In response, the Corporate Debtor vide letter dated 03.02.2020 (wrongly stated as 03.02.2019) intimated the Lenders regarding the progress made by them in various Projects being undertaken by the Corporate Debtor and also requested L&T to consider not levying the penal charges or default interest on the Facilities and/or appropriate any of surplus available from Facility 1 towards any such penal charges and/or default interest.

Considering the outbreak of Covid-19, a Memorandum of Understanding dated 15.06.2020 was executed between the Corporate Debtor and the Lenders, wherein, certain terms were agreed upon by all the Parties viz., Manyata Developers Pvt. Ltd., L&T Finance Limited, L&T Housing Finance Limited and L&T Infrastructure Finance Company Limited in which inter alia the Financial Creditor agreed to extend the six-month moratorium for the months of March to August, 2020 in respect of both Loan 1 and Loan 2. Ld. Counsel for the Petitioner stated that the Corporate Debtor failed to fulfil its obligations under the MoU and proceeded to default in making payments towards the interest payable under the Loan Agreements from October, 2020. Thereafter, the entire debt under the Loan Agreements were assigned to the Financial Creditor herein vide Assignment Agreements dated 30.03.2021.

Shri Sharan A. Kukreja, Ld. Counsel appearing for the Petitioner submits that the ‘default’ as per the I&B Code, has accrued before the commencement of Section 10A of the Code. In this regard, he has taken us through the Loan Agreement dated 26.09.2017 entered into between M/s. Manyata Developers Private Limited, M/s. L&T Finance Limited, M/s. L&T Housing Finance Ltd., wherein, Article 13 has prescribed various occurrences that shall be treated as an Event of Default and Article 14.1 that shows the consequences of Event of Default. Furthermore, he stated that L&T Housing Finance Ltd. vide letter dated 03.06.2019 (which is placed at Page 454 of the CP) called upon the Corporate Debtor to cure the non-compliance of various covenants. In response to the same, the Corporate Debtor vide letter dated 10.06.2019 (which is placed at Page 459 of the CP) besides intimating the L&T Housing Finance Ltd. of various instances referred to in the letter dated 03.06.2019, has, however, not disputed the defaults in question, but made attempts in explaining the reasons for non-compliance. Since the debt in question has been assigned to the Financial Creditor herein, considering the defaults of the Corporate Debtor, the Financial Creditor issued Default Intimation cum Demand Notice dated 27.10.2021 where under it has recalled the entire facility and called upon the Corporate Debtor to pay the outstanding sum of Rs.1022,37,10,315/- within 7 days from the date of Demand Notice. However, the Corporate Debtor failed to remit the outstanding amounts within the stipulated time hence the entire loan amount stands recalled. He also averred that the Record of Default (Form-D) from NeSL is not the only mode of evidence to prove the existence of a financial debt. In support of his contentions, he has inter alia relied upon the decisions given by the Hon’ble Apex Court in Laxmi Pat Surana v. Union Bank of India & Anr., (Para 43) (2021) 8 SCC 481; Innoventive Industries Ltd. v. ICICI Bank & Anr., (Para 27) (2018) 1 SCC 407; Swiss Ribbons Pvt. Ltd. & Anr. v. Union of India & Ors., (Para 54-55) (2019) SCC OnLine SC 73, and the Judgment of Hon’ble High Court of Calcutta in Univalue Projects Pvt. Ltd. v. Union of India & Ors. (Paras 57, 61-63) (2020) SCC OnLine Cal 1452.

On the contrary, Shri E. Om Prakash, Ld. Senior Counsel appearing for the Respondent has drawn our attention to Page 33 of the Petition which shows that the first default in respect of the Loan Facility – 1 and Loan Facility – 2 has occurred on 15.12.2020; at Page 37 of the Petition which shows the date of Non-Performing Asset as 15.03.2021; at Page 546 (Annexure-25: Total Amounts in Default and Initial Dates of Default) of the Petition which shows the initial Date of Default as 15.12.2020; and also drawn our attention to the four reports of the NeSL dated 26.04.2022 relied upon by the Financial Creditor (which are placed on record at Annexure-29 of the Petition) wherein specifically at Pages 580, 593, 606 and 618, the Date of Default in all these reports were shown as 15.03.2021, and thus the same falls within the ambit of Section 10A of the I&B Code, 2016. These documents, i.e. Part-A of NeSL Form has been filed by the Petitioner itself with the CP. Further, as per the Repayment Schedule annexed with the Sanction Letter as well as the Loan Agreement issued by the Original Lenders towards Loan Facility – and Loan Facility – 2, the Corporate Debtor was granted moratorium period of 48 months and 60 months respectively. Accordingly, the liability of the Corporate Debtor to make payments would only accrue after 48^th month and 60^th month from the date of disbursement. In terms of the repayment schedule, the instalments towards repayment of the Loan Facility were to become due in the months of September, 2021 and March, 2023 for Loan Facility-1 & 2 respectively and thus there is no question of any amount payable on or before the aforesaid dates as alleged by the Financial Creditor. In support of his contentions, he further drawn our attention to the Judgment rendered by the Hon’ble Supreme Court in the case of Ramesh Kymal v. Siemens Gamesa Renewable Power Private Limited reported in (2021) 3 SCC 224 and another Judgment rendered by the Hon’ble NCLAT in the case of SLB Welfare Association v. PSA Impex (P) Ltd., reported in (2022) SCC OnLine NCLAT 1584, and the recent Order dated 08.05.2023 in CP (IB) No.27/CB/2023 and therefore seeks for dismissal of the Company Petition as not maintainable.

Before we consider the respective arguments of the two sides, it is apt to reproduce the relevant portion regarding the first default date in respect of Loan Facility – 1 and Loan Facility – 2 and also the Date of NPA as given in S.No.2 of Part-IV of Form-1 of the CP, which is as under:

Further, the Financial Creditor in Annexure 25 at Page 546 of the Petition has mentioned the Initial Date of Default, which is reproduced hereunder:

The Form-1 to be filed with the Application u/s 7 is a mandatory requirement in accordance with the provisions of Section 7(2) of the Code r/w Regulation 4(1) of the IBBI (Application to Adjudicating Authority) Rules, 2016. In Part-IV of the Form-1 there is a specific column wherein the ‘Amount claimed to be in default and the date on which the default occurred’ have to be clearly mentioned in Item No.2. The mentioning of a specific ‘Date of Default’ is extremely significant since this date is relevant also for determining the satisfaction of the period of limitation of three years for the purpose of filing of the Application. On a perusal of the above reproduction of the relevant portion of Item No.2 of Part-IV of Form-1 it is noticed that the First Date of Default has specifically been mentioned by the Applicant as 15.12.2020. There is also the reproduction of the Annexure-25 of the CP (Page 546) above in Para 21, in which the total amounts in default and initial dates of default has been given in a tabular form. In this Table, against each of the Loan Facility, the ‘Initial Date of Default’ is specifically mentioned as 15.12.2020. In the Note given below to the Annexure-25, it is also mentioned that the account of the Corporate Debtor became NPA with effect from 15.03.2021, as per the guidelines issued by the Reserve Bank of India.

During the course of arguments, the Ld. Senior Counsel for the Corporate Debtor specifically mentioned these particular instances in the documents filed with the CP itself, along with at Page 8 of the Vol. I of the Petition in which under the List of Dates and Events, 15.12.2020 was mentioned as the ‘first Date of Default’. He also emphasised that in the Petition at Pages 580, 593, 606 and 618, the Applicant has itself attached the documents pertaining to the Part-A of the NeSL Form, in all of which, the Date of Default has been mentioned as 15.03.2021, with remarks that against the Date of Default, Date of NPA has been mentioned. Therefore, it was emphasised that at multiple places in the Application u/s 7 and the accompanying documents i.e. starting from Page 8, Part-IV of Form-1, Annexure-25, etc., the Applicant has mentioned that the initial Date of Default was 15.12.2020; whereas, the NPA Date of 15.03.2021, was considered in the Part-A of the NeSL Reports. It is subsequently noticed that the NeSL has issued four ‘Record of Defaults’ in Form-D on 26.10.2022, after completion of the authentication process, in which ‘Dates of Default’ has been mentioned as 15.03.2021 for the four different amounts of Loans amounting to Rs.1229,63,14,525/- in total. In the Records of Default in Form-D, it is stated that the same has been taken to be date of declaration as NPA.

Now coming to the issue regarding the ‘Date of NPA’ as against the ‘Date of Default’, a perusal of the Reserve Bank of India Master Circular on Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances, reveals that the definition of NPA is given as under:

Now we consider the argument of the Applicant that in fact the Date of Default was much prior to the commencement of the period u/s 10A i.e. 25.03.2020. The Applicant had tried to argue repeatedly and in various documents like rejoinder, written submissions, synopsis etc., that the Date of Default was much prior to this cut-off date. If that is the case, why in the first stage in the Application and various accompanying documents, the Applicant itself mentioned 15.12.2020 as the ‘initial Date of Default’? When it is the ‘Initial’ Date of Default, how could the default have occurred prior to this date? Moreover, though in the various submissions they have argued regarding various other dates during June 2019 and also January 2020 when the correspondences were made between the Lender and the Corporate Debtor regarding non-payment of principal / interest; and provisions regarding the levying of default interest / penal interest etc.; nowhere the Applicant has categorically claimed as to what was the specific ‘Date of Default’ prior to the cut-off date i.e. 25.03.2020. Only vague submissions were made, without being certain as to what actually was its claim regarding the ‘Date of Default’.

It is emphasised that the concept of ‘Date of Default’ is a mandatory and statutory requirement, which is to be clearly mentioned in Item No.2 of Part-IV of the statutory Form-1. There is a specific provision under Section 7(5)(b) of the Code that the Application may be rejected if it is incomplete; and not specifying a Date of Default in Form-1 renders the application to be incomplete; as also has been judicially held in some pronouncements of Co-ordinate Benches. Therefore, here once the Applicant has itself mentioned the Date of Default as 15.12.2020 in Part-IV of Form-1, which is a statutory requirement, now they cannot retract and claim at this stage that the Date of Default was something else prior to the cut-off date of 25.03.2020 u/s 10A of the Code. This argument is taken merely to somehow wriggle out of the restriction imposed by Section 10A of IBC, 2016. Further, there is no merit in the argument that the correspondences having taken placed between the Lender and the Corporate Debtor on different occasions in June 2019 and January 2020 would make the Applicant eligible to shift, and prepone the Date of Default to such a date which is prior to 25.03.2020. As already stated above that these correspondences are in the normal course between the Lender and Borrower, where reminders are issued and provisions of penal interest etc., are highlighted. As discussed above, there is no other date prior to 25.03.2020, which has been stated to be the Date of Default and the Applicants themselves have not made any such claim of such specific date.

The fact is that the Applicant is uncertain and totally confused on this issue. It is amply corroborated from the fact that in the Synopsis filed vide Diary No.1611 dated 21.03.2023 and subsequently also, it is also contended that after the loan was assigned to the Financial Creditor herein on 27.10.2021 the Financial Creditor issued a notice to the Corporate Debtor asking to pay the entire amount of Rs.1022.37 Crores within 7 days i.e. by 05.11.2021, and due to non-fulfilment of the same, this Date of 05.11.2021 can also be considered as the ‘Date of Default’ as an alternative argument. Therefore, the Applicants have made a contention that the ‘Date of Default’ is either prior to the cut-off date of 25.03.2020 which is not specified, or else it is on 05.11.2021 which is post the suspension period u/s 10A of the Code. This sort of argument without any tenable basis is not acceptable at all and cannot be considered. The Applicants herein having themselves specified the Date of Default as 15.12.2020 in the statutory Form-1 at Part-IV, and at various other documents filed with the Company Petition as discussed above. Now, the Applicants are attempting to make different type of alternative arguments contradictory to each other, just to somehow circumvent the embargo imposed by the provisions of Section 10A of the Code. In this connection, it is also relevant to mention here that there was also a Moratorium on the payment of the Principal and Interest pursuant to Regulatory Package announced by RBI dated 27.03.2020; following which a MoU was also signed by the Lenders and the CD for the Moratorium to be extended from March 2020 to August 2020. Accordingly, there cannot be any justification for the Applicants’ claim regarding the Date of Default being on some date prior to 25.03.2020.

In this connection, the Ld. Senior Counsel for the Respondent have relied on various judgments cited above. It was emphasised that in the decision of the Hon’ble Apex Court in the case of Ramesh Kymal (supra), the Hon’ble Apex Court has inter alia observed as under at Para 11:

Thus, the Hon’ble Apex Court has categorically emphasised the sanctity of the Date of Default as stated in the Application and the statutory notice, and rejected the attempt to prepone it just to get over the embargo imposed by provisions of Section 10A of the Code.

The Ld. Senior Counsel for the Corporate Debtor has also relied on the Hon’ble NCLAT decision in the case of SLB Welfare Association dated 04.12.2022 (supra), in which also the attempted claim of the Date of Default to be shifted to a different date than what was mentioned in Part-IV of Form-5 was rejected. In the Part-IV of Form-5, the Date of Default was stated to be 31-3-2020 and the Adjudicating Authority took the date of acknowledgement of 03.06.2021 as the Date of Default so that the Application comes out of the exclusion of Section 10A of the Code. It was inter alia held as under:

Another decision cited by the Ld. Senior Counsel for the Respondent is CP (IB) No.27/CB/2023 of NCLT Cuttack Bench dated 08.05.2023. Here also, the attempt made by the Applicant to shift the Date of Default was rejected. The previous Petition filed u/s 7 of the Code in that case was rejected since the Date of Default was mentioned as 15.12.2020 in the Application, which was falling u/s 10A of the Code. The Applicant filed another Petition giving a different Date of Default, which was after the exclusion period of Section 10A. The Co-ordinate Bench of the NCLT Cuttack rejected the application stating that fixing/shifting the Date of Default by the Applicant to suit its claim, is not allowable.

In this connection, it is relevant to mention another recent decision of the Hon’ble NCLAT, Principal Bench, New Delhi, in the case of Ramdas Dutta v. IDBI Bank Ltd. & Anr., dated 26.04.2023, in which also it was categorically observed that the Date of Default cannot be changed.

In the Synopsis filed on 21.03.2023, the Applicant has stated that even this period of suspension does not extinguish the debt and the right of the Financial Creditor to recover the same will not be affected. Therefore, in effect, the Applicants are emphasising their “right to recover”. Hence, the Petitioner is not for resolution but for recovery, which is not permissible as per the various judicial precedents in this regard. There is no doubt that debt will not be extinguished and the Petitioner has every right to pursue alternative remedies for recovery of the same, however, not under the provisions of IBC. Another argument by the Applicant has been regarding the continued Default on the part of the Corporate Debtor, and therefore they have raised the above alternative plea that the 05.11.2021 can also be considered as the Date of Default. It is hereby clarified that there is no concept like continuous Default, since in every case the default once occurred would necessarily continue, otherwise there would be no occasion for filing of an Application u/s 7 of the Code. To make it clear, if a debt is already paid, the default will be extinguished and there cannot be any cause of filing Application u/s 7. Therefore, if a debt and default has occurred, it will definitely be continuing for the eligibility to file Application u/s 7. If in such a case another notice is issued for payment of the debt, it will not enable the shifting of the Date of Default. If such an argument is allowed to be accepted, the provisions of Section 10 of the IBC would become redundant and meaningless. This is because if a default has occurred during the exclusion period of Section 10A, by simply issuing a legal notice subsequent to the exclusion period having ended, the Date of Default will shift in every case and Application becomes eligible for admission under Section 7 or Section 9. This is clearly barred by the provisions of Section 10A of the IBC r/w its Proviso which states as under:

The interpretation of a statutory provision cannot be made in such a manner which acts towards making it redundant and meaningless.

On perusal of the above, it is seen that the Financial Creditor itself in Sr.No.2 of Part-IV of the Form-1 has clearly mentioned the Default date in respect of the Loan Facility – 1 and Loan Facility – 2 as 15.12.2020; and the account of the Corporate Debtor becoming a Non-Performing Asset (NPA) with effect from 15.03.2021. Also, Annexure-25 shows the total amounts in default along with initial dates of default for various Facilities as 15.12.2020. Furthermore, in all the Four NeSL Reports dated 26.04.2022 submitted by the Financial Creditor along with the Company Petition, as stated supra, the Date of Default has been mentioned as 15.03.2021, with the Remarks that in Date of Default column, Date of NPA has been reported. We have already discussed above, that the ‘Date of NPA’ is inherently linked to the ‘Date of Default’; in accordance with the RBI Prudential Norms for Income Recognition and Asset Classification.

As stated by the Financial Creditor, the Corporate Debtor in its Audited Financial Statement as on 31.03.2021 has inter alia provided in the disclosure that it has availed term loan from L&T Financial Services and post Covid-19 2^nd wave, the Company faced severe financial crisis leading to non-payment / part payment of interest starting from October, 2020. As a result, the loan facility became a NPA. However, merely stating the due amount in the Balance Sheet of the Corporate Debtor as on 31.03.2021 does not change the Date of Default i.e. 15.12.2020 or the Date of NPA i.e. 15.03.2021. The Date of Default of 15.12.2020 clearly falls within the excluded period under the provisions of Section 10A of the IBC. Accordingly, for the various reasons discussed above, this application u/s 7 of the Code is not maintainable, as the debt is clearly hit by the provisions of Section 10A of IBC.

To recapitulate,

Accordingly, we are of the considered opinion that the instant Company Petition bearing C.P. (IB) No.125/BB/2022 is liable to be dismissed as not maintainable and is accordingly dismissed. However, this order will not come in the way of the Petitioner to pursue other legal remedies under any other Laws, if it is so advised.