Tribunal Clarifies Insolvency Proceedings Start Date: Default Date is When Account Becomes NPA, Not Affected by Renewals.

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....Maintainability of section 7 application - Initiation of CIRP - existence of debt and default - date of default - On 14.02.2020 the account was declared NPA - The Appellate Tribunal emphasized that the date of default, being the date of declaration of the account as NPA, was valid for initiating insolvency proceedings under Section 7. The Tribunal ruled that the default date should be considered as the date of declaration of the account as NPA, rather than the date of renewal of the working capital limit. It clarified that the renewal of the limit did not affect the occurrence of default by the Corporate Debtor in fulfilling its financial obligations.....