Section 10A bar on insolvency failed where pre-period default and continuing post-period default were shown.

Section 7 insolvency proceedings are barred under Section 10A only where the default relied on arose within the protected period; the label of NPA is not enough, because the test remains actual default. Here, the corporate debtor had already admitted liability in a pre-Section 10A revival letter, the facilities were renewed during the relevant period, and account records showed dues existing on 31.03.2021 with default continuing thereafter. On that basis, the pre-Section 10A and continuing post-Section 10A defaults were sufficient to sustain the insolvency action, and the application was not barred.

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Issues: Whether the Section 7 application was barred by Section 10A of the Insolvency and Bankruptcy Code, 2016, and whether the declaration of the account as a non-performing asset could be treated as the date of default despite material showing default before and after the Section 10A period.

Analysis: The corporate debtor had admitted outstanding liability in a revival letter issued before the Section 10A period. The record also showed that the financial facilities were renewed during the relevant period and that the funded interest term loan remained unpaid in accordance with the repayment schedule. The account statements and the appellant's own repayment chart reflected dues existing on 31.03.2021, and the default continued thereafter. The legal position applied was that the declaration of an account as NPA can ordinarily be treated as the date of default, but Section 7 turns on actual default, not merely on the NPA label. A default arising during the Section 10A period cannot by itself sustain an insolvency proceeding, but where there is pre-Section 10A default and continuing post-Section 10A default exceeding the threshold, the proceeding is not barred.

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

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