TaxTMI 
TaxTMI 
2026 (2) TMI 29
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....or the appellant challenging the order submits that in Part IV of the Section 7 application, date of default was mentioned with respect to both the contracts as 15.04.2021 and even though first default took place on 15.01.2021, default continued after 10A period was over which was relied in Part IV by the financial creditor. It is submitted that when default is committed subsequent to 10A period, the financial creditor is not precluded from initiating Section 7 application. It is submitted that financial creditor is not supposed to rush and file a Section 7 application on first date of default and adjudicating authority had not adverted to Part IV of Section 7 application in holding that application is barred by Section 10A. 4. Learned counsel for the respondent refuting the submissions of the appellant submitted that the objection with regard to Section 10A was in fact preliminary objection raised by respondent and adjudicating authority after accepting the said objection has dismissed the application as barred by Section 10A and has not gone into other pleas which was raised by the corporate debtor. It is submitted that the default admittedly occurred within the 10A period, wh....
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....7 15-01-2022 11,43,000 - - 11,43,000 209 178737 15-02-2022 11,43,000 - - 11,43,000 178 178737 15-03-2022 11,43,000 - - 11,43,000 150 178737 15-04-2022 11,43,000 - - 11,43,000 119 178737 15-05-2022 11,43,000 - - 11,43,000 89 178737 15-06-2022 11,43,000 - - 11,43,000 58 178737 15-07-2022 11,43,000 - - 11,43,000 28 Total 2,06,88,616 - 24,00,616 1,82,88,000 Contract No. 180822 Contract no. Date on which default occurred Amount claimed to be in default (In Rs.) Pre- Black out Period During Black Out Period Post Black Out Period Days of Default 180822 15-02-2021 8,00,412 - 8,00,412 - 543 180822 15-03-2021 8,36,700 - 8,36,700 - 515 180822 15-04-2021 8,36,700 - - 8,36,700 484 180822 15-05-2021 8,36,700 - - 8,36,700 454 180822 15-06-2021 8,36,700 - - 8,36,700 423 180822 15-07-2021 8,36,700 - - 8,36,700 393 180822 15-08-2021 8,36,700 - - 8,36,700 3....
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....n 10A. 9. Counsel for the appellant has placed reliance on the judgment of this Tribunal in 'Koncentric Investments Ltd.' Vs. 'Standard Chartered Bank,' reported in [2022 SCC OnLine NCLAT 1254], where this Tribunal in paragraph 21 of the judgment has categorically laid down that financial creditor is at liberty to file Section 7 application but it is neither mandatory nor necessary that on first default the financial creditor should rush to the insolvency court. In paragraphs 21, 24 & 25, following has been laid down: "21. The Insolvency and Bankruptcy Code including rules and regulations, does not indicate that it is mandatory for the financial creditor to rush to file section 7 application whenever the first default is committed in payment of interest. Although it had liberty to file an application even if there is default in payment of interest. Section 7(1) of the Code uses the expression when a default has occurred there is no indication under section 7 of the Code that unless an application is filed on the first default committed, no application can be filed when subsequent defaults are committed. The financial creditor is at liberty to file a section 7 applicatio....
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....amount which is barred by time. 25. To accept the submissions made by learned senior counsel for the appellant, we have to read one additional word under section 7 before the word "default" under sub-section (1) of section 7 of the Code, i.e., the word first. The submission of the appellants is that when first default is committed by a debtor, the creditor has necessarily and mandatorily to initiate application under section 7 failing which the right of creditor to file an application under section 7 of the Code shall be defeated by law of limitation. It is well settled principle of statutory interpretation that in a statute the court cannot read an additional word which has not been used by legislator. The definition of default in sub-section (12) of section 3 itself comprises several events, i.e., non-payment of debt when whole or any part or instalment of the amount of debt has become due. The default may be of different nature on some default the entire amount may become due like when account is declared non-performing asset, there may be some default by happening of which only fraction of amount became due like in present case non-payment of interest on June 30, 2015 ....