Section 10A suspension did not bar insolvency where a later interest default after the protected period supported the Section 7 claim.

A Section 7 insolvency application is not barred by Section 10A where the principal repayment default fell within the suspension period but the creditor also relied on a later default in contractual interest accruing after that period. The financing documents provided for monthly and additional interest, capitalisation of unpaid interest, and continuing liability on the outstanding amount. The post-10A interest default was treated as an independent default meeting the statutory threshold, so the CIRP admission was upheld.

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Issues: Whether a Section 7 application is barred where the principal repayment default fell within the Section 10A suspension period, but the financial creditor relied on a subsequent default in interest occurring after the suspension period.

Analysis: The repayment of the loan fell due on 11.02.2021, which was within the Section 10A period, and no Section 7 application could be founded on a default occurring during that protected period. However, the financing documents separately provided for monthly interest and additional interest on default, with capitalisation of unpaid interest and liability continuing on the outstanding amount. The application was not based only on the principal default within the Section 10A window, but also on default interest accruing from 26.03.2021 to 31.05.2021, which was found to be more than the statutory threshold. A post-10A default in interest was treated as an independent default capable of sustaining the insolvency application.

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

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