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Judgment
O R D E R
Per: Justice Rakesh Kumar Jain:
This appeal is directed against the order dated 15.11.2023, passed by the Adjudicating Authority (National Company Law Tribunal, Division Bench-1, Chennai), by which an application i.e. CP/IB/115/CHE/2021 filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (in short ‘Code’) by the Financial Creditor for an amount of Rs.28,55,30,262/- against the Corporate Debtor has been dismissed.
The Adjudicating Authority framed two issues while disposing of the application. The said two issues are as follows: -
“i.Whether the Applicant is a Financial Creditor under the provision of IBC, 2016 and whether there is any Financial Debt which is due and payable by the Corporate Debtor to the Applicant under the provisions of IBC, 2016.
ii.Whether the present application falls within the period mentioned under Section 10A of IBC 2016?”
Both issues have been decided against the Appellant (Financial Creditor) who has preferred this appeal, being aggrieved against the impugned order. The issue no. ii is in regard to the maintainability of the application on which the Adjudicating Authority has passed the following order:-
“ISSUE NO. (ii)
44.The Applicant: in Part -IV of the Application has clearly mentioned the date of default as 22.02.2021. As per Section 10A of IBC,2016 for the default which had occurred during 25.03.2020 lo 25.03.2021, no Application under Section 7,9 and 10 of IBC, 2016 can be filed. Section 10A of IBC, 2016 is as follows;
10A. Suspension of Initiation of corporate insolvency resolution process.
Notwithstanding anything contained in sections 7, 9 and 10, no application for initiation of corporate insolvency resolution process of a corporate debtor shall be filed, for any default arising on or after 25th March, 2020 for a period of six months or such further period, not exceeding one year from such date, as may be notified in this behalf:
Provided that no application shall ever be filed for initiation of CIRP of a corporate debtor for the said default occurring during the said period.
Explanation-For the removal of doubts, it is hereby clarified that the provisions of this section shall not apply to any default committed under the said sections before 25th March, 2020.
45.As per the Ministry of Corporate Affairs Notification S.O. 3265(E) dated 24th September 2020, the period of 10A was extended three months from 25th September 2020. Thereafter, the Ministry of Corporate Affairs vide Notification S.O. 4638(E) dated 22.12.2020 has extended the 10A period for three months from 25th December 2020. Thus, the 10A period would fall from 25.03.2020 till 25,03.2021.
46.In the present case, the Applicant/Financial Creditor has categorically mentioned in Part-IV of the Application, the date of Default as 22.02.2021. Thus, even as per the Applicant the default had occurred for the first time only on 22.02.2021, The Applicant has not filed any Application to change the date of default in Part-IV of the Application, or has advanced any arguments rebutting the date of default as falling outside the scope of Section 10A of IBC, 2016. In the said circumstances, it is clear that the date of default as mentioned in Part-IV of the Application squarely falls within the Section 10A period and as such no Application under Section 7, 9 and 10 of IBC, 2016 can ever be filed against the Corporate Debtor if the default has occurred during the Section 10A period.
47.Thus, we are of the view that the Application falls within the period mentioned under Section 10A of IBC 2016 and as such this Application is required to be rejected on the said count also. Accordingly, issue no. (ii) is answered.”
Counsel for the Appellant has been asked to argue on issue no. ii first regarding which he has submitted that the date of default dated 22.02.2021 might have been mentioned by mistake but he could not deny the fact that no effort was made by the Appellant to correct the mistake by filing an appropriate application before the Adjudicating Authority. The law regarding applicability of Section 10A of the Code is well settled that no application can ever be filed for initiation of CIRP for the default occurring during the period between 25.03.2020 to 25.03.2021 whereas the date of default has specifically been mentioned in Part IV of the application as 22.02.2021 which falls within the aforesaid two cutoff dates.
Thus, in view thereof, there is no error committed by the Adjudicating Authority while recording its finding in issue no. ii. Since, we have upheld the finding recorded by the Adjudicating Authority on issue no. ii, therefore, the application filed under Section 9 is held to be not maintainable and as such, the present appeal is hereby dismissed. No costs.