NCLAT expounds that no application can be filed, even after expiry of the period under Section 10A for the default which occurred during the 10A period, Read More

The NCLAT, Principal Bench New Delhi ruled that the language of the statute provides that no application for initiation of Corporate Insolvency Resolution Process of a Corporate Debtor shall be filed for any default arising on or after 25.03.2020.

The provision cannot be read to mean that after the period is over the application can be filed. If such interpretation is accepted, the whole purpose and object shall be defeated. The purpose and object of introduction of Section 10A was to give relief to the Corporate Debtor who committed default during the period which is covered by Section 10A.

The Bench opined that no application can be filed, even after expiry of the period under Section 10A for the default which occurred during the 10A period.

Brief Facts:

The present appeal is filed against an impugned order whereby an application filed under Section 10 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) was dismissed on account of bar of Section 10A.

 Contentions of the Appellant:

It was submitted that bar of Section 10A only provides that during the continuance of the bar, no application can be filed. However, the debt still remains, and after the period is over the application can be filed.

Observations of the Tribunal:

It was ruled that the language of the statute provides that no application for initiation of Corporate Insolvency Resolution Process of a Corporate Debtor shall be filed for any default arising on or after 25.03.2020.

The provision cannot be read to mean that after the period is over the application can be filed. If such interpretation is accepted, the whole purpose and object shall be defeated. The purpose and object of introduction of Section 10A was to give relief to the Corporate Debtor who committed default during the period which is covered by Section 10A.

The Bench opined that no application can be filed, even after expiry of the period under Section 10A for the default which occurred during the 10A period.

The decision of the Tribunal:

Accordingly, the appeal was dismissed.

Case Title:  Office Beanz Pvt. Ltd. v.  …

Case No.: Company Appeal (AT) (Insolvency) No. 1725 of 2024

Coram:  Justice Ashok Bhushan (Judicial Member), Barun Mitra (Technical Member), Arun Baroka (Technical Member)

Advocate for Appellant: Advs. Mr. M. Datta, Mr. Aditya Guha and Mr. Anand Kumar Soni

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