Section 10A bar not attracted where NPA date marked default and facility renewal did not shift the default date.

A Section 7 insolvency application was examined against the Section 10A bar under the Insolvency and Bankruptcy Code, 2016. The Tribunal treated 14.02.2020, the date the account was declared NPA, as the date of default because that date was expressly recorded in the Section 7 application and consistently relied on in SARFAESI proceedings. Renewal of the working capital limit up to 25.07.2020 was held to be only a renewal of the sanctioned facility and not a postponement of default. Section 10A was therefore not attracted, and admission of the insolvency application was upheld.

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Issues: Whether the Section 7 application was barred by Section 10A of the Insolvency and Bankruptcy Code, 2016 on the plea that the default occurred only on 25.07.2020, and whether the declaration of the account as NPA on 14.02.2020 could be treated as the date of default.

Analysis: The application under Section 7 specifically recorded 14.02.2020 as the date of default, being the date on which the account was declared NPA. The record also showed that the same date of NPA had been consistently referred to in the proceedings under the SARFAESI Act. The renewal of the working capital limit up to 25.07.2020 was only a renewal of the sanctioned limit and did not postpone or alter the date of default. The bar under Section 10A was therefore not attracted. The earlier proceedings relied upon by the appellant were found to have no bearing on the dispute before the Tribunal.

Conclusion: The Section 7 application was not barred by Section 10A, and the admission of the insolvency application was upheld.

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