https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=768404 https://www.taxtmi.com/caselaws?id=768404 Dismissal of Section 9 application filed by the Operational Creditor - pre-existing dispute - date of default fell within the Section 10A period - HELD THAT:- On perusal of Part IV of Form 5 as annexed in the Section 9 petition, it is found that the dates of default have been clearly shown as 03.05.2020, 15.08.2020 and 01.01.2021 in respect of the outstanding operational debt claimed by the Operational Creditor. The same dates of default have also been mentioned in Form 3 of the Demand Notice dated 27.01.2022 as is seen at page 170 of APB. Whether these three dates of default mentioned in Section 8 Demand Notice and Section 9 application fall within the purview of the prohibited period prescribed under Section 10A and consequentially hit by the bar imposed by Section 10A of the IBC? - HELD THAT:- The ambit and scope of Section 10A has been well settled in the landmark judgment of the Hon'ble Supreme Court in Ramesh Kymal Vs Siemens Gamesha Renewable Power Pvt. Ltd. [2021 (2) TMI 394 - SUPREME COURT] wherein it was held that no application for initiation of CIRP under Section 9 can be initiated for default which is committed during the Section 10A period - In the present case, the dates of default of the claims, basis which the Section 9 application has been filed, the dates indisputably fall during the prohibited period of Section 10A of IBC. The dates of default in the present facts of the case fell between 03.05.2020 and 01.01.2021 which dates were hit by Section 10A of the IBC. In terms of the statutory provision of Section 10A and as held by the Hon'ble Supreme Court in Ramesh Kymal judgment, no default falling within this period can form the basis for initiating CIRP since the default which occur during the Section 10A period cannot be included in the calculation of debt and default for initiating CIRP. No liability can be fastened on the Corporate Debtor for default committed during Section 10A period. The Adjudicating Authority has therefore not committed any error in holding the Section 9 application as non-maintainable. There are no error in the impugned order holding that since the date of default falls within the Section 10A period, Section 9 proceedings under IBC cannot be initiated at the instance of Operational Creditor. The contention of the Appellant that the Adjudicating Authority should have modified the date of default after examining the records is an absurd proposition. If the date of default required any change or modification, the onus was on the Appellant to have sought leave of the Adjudicating Authority to file an amendment application. To expect the Adjudicating Authority to have amended the date of default without any amendment application or specific pleading made for such a modification would tantamount to the Adjudicating Authority exceeding its jurisdiction which cannot be countenanced. Conclusion - The Section 9 application is non-maintainable due to the dates of default falling within the Section 10A period.The Adjudicating Authority correctly dismissed the application without amending the dates of default. There are no merit in the Appeal. The Appeal is dismissed. Case-Laws IBC Tue, 01 Apr 2025 00:00:00 +0530