TaxTMI 
TaxTMI 
2026 (9) TMI 300
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....e ex-director of Superfine Metals Pvt. Ltd. ("Corporate Debtor"), under Section 61 of the Insolvency and Bankruptcy Code, 2016 ('Code') against the Order dated 16.07.2026 ("Impugned Order") passed by the National Company Law Tribunal, Mumbai Bench-II ("Adjudicating Authority") in Company Petition (IB) No. 232/MB/2023. Central Bank of India (Bank) who is the Financial Creditor of the Corporate Debtor, is the Respondent No.1 herein. Mrs. Megha Agarwal, who is the Interim Resolution Professional, is Respondent No. 2, herein. 2. The Appellant submitted that it is a MSME unit and is engaged in the manufacture, processing, sale, distribution, import and export of ferrous, non-ferrous and alloy extruded products, including aluminium, copper and brass sections, pipes, channels, dies, chemicals, extrusion equipment and machinery. 3. It is the case of the Appellant that only issue that falls for determination in this Appeal is whether the provisions of Section10A of the Code stand attracted to the Section 7 Application filed by the Bank. The proved date of default, as recorded with the Information Utility and admitted in Part IV of the unamended Form 1. This falls squarely within....
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....ndments did not merely correct or clarify existing pleadings but sought to substitute the original case with an entirely new case having dates of default intended to fall outside the Section 10A period. 7. The Appellant submitted that although the amendment was permitted by the Adjudicating Authority vide order dated 06.05.2024, the Adjudicating Authority kept open the issue of applicability of Section 10A and recorded that the question whether the alleged defaults fell within the Section 10A period was to be decided on merits. Therefore, the mere allowance of the amendment did not render the amended dates of default conclusive or deprive the Appellant of its substantive defence. 8. The Appellant contended that the Bank thereafter substituted the original Form-1 with a new Form-1 dated 30.09.2023 and restricted its claim to only the Cash Credit and Ad-Hoc facilities, alleging dates of default as 10.03.2020 and 24.03.2020 respectively. The amended amounts claimed were Rs. 52,47,99,252/- towards the Cash Credit facility and Rs. 3,73,78,272/- towards the Ad-Hoc facility. However, the Bank continued to retain 29.11.2020 as the date of NPA. The Appellant submitted that the simulta....
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....on 3(12) of the Code is the non-payment of a debt when the same becomes due and payable. Read with the definition of "financial contract", the date of default must necessarily arise from the contractual terms governing when the debt became due and payable. The Appellant submitted that the amended dates of 10.03.2020 and 24.03.2020 were not supported by any corresponding contractual stipulation and were introduced only to overcome the Section 10A bar. 14. The Appellant submitted that the Bank's case regarding the Cash Credit facility was fundamentally inconsistent with the admitted NPA date of 29.11.2020 as the Bank itself pleaded that the Appellant's account was regular as on 29.02.2020. Further, its reliance upon the RBI Covid Regulatory Package dated 27.03.2020 was misconceived, as the said package permitted deferment of recovery of interest on Cash Credit facilities for the period from 01.03.2020 to 31.05.2020. Consequently, no default on account of non-payment of such interest could have been validly asserted on 10.03.2020 or continued up to 24.03.2020. 15. The Appellant strongly refuted the allegations of the Bank submitted, with reference to the FITL sanction letter dat....
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....ulatory Package dated 23.05.2020 permitted deferment of interest recovery from 01.06.2020 to 31.08.2020 and conversion of the accumulated interest into a FITL. Pursuant thereto, the Bank sanctioned an FITL of Rs. 3,16,90,762/- on 09.09.2020 towards interest accumulated from March 2020 to August 2020. The Appellant contended that, having credited the accumulated interest up to 31.08.2020 through the FITL mechanism, the Bank could not simultaneously assert a default towards such interest on 10.03.2020. 18. The Appellant submitted that the System Generated Extract relating to the Cash Credit account records 95 days of non-credit and specifically identifies 29.11.2020 as the NPA date. This contemporaneous system-generated record, according to the Appellant, is consistent with the ordinary 90-day NPA mechanism and materially contradicts the subsequently pleaded date of 10.03.2020. 19. The Appellant further contended that the Bank's attempt to justify the Cash Credit default date through the Working Capital Consortium Agreement dated 18.11.2016 was untenable. While relying upon the 2016 agreement, the Bank sought to rely upon payment terms contained in the earlier Sanction Letter d....
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.....05.2024 itself preserved the Appellant's objections on merits, including the applicability of Section 10A. Therefore, the Appellant remained entitled to challenge the amended dates during final adjudication. 25. The Appellant contended that the Impugned Order proceeded on the premise that the Cash Credit default occurred on 10.03.2020 and the Ad-Hoc default on 24.03.2020, although the original Section 7 petition, the NeSL report and the original Form-1 had uniformly recorded 29.11.2020 as the date of default. The Appellant submitted that the Adjudicating Authority could not disregard the original pleadings and accept subsequently introduced dates without adequately establishing their contractual and documentary basis. 26. The Appellant submitted that paragraph 4.4 of the Impugned Order does not identify any contractual provision requiring the alleged excess under the Cash Credit facility to be "regularised on or before 10.03.2020". The finding, therefore, lacks a contractual or documentary foundation and fails to establish when the debt actually became due and payable. 27. The Appellant submitted that the Bank's own pleadings regarding NPA classification are also contrary....
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.... failed to properly consider the original date of default, the NPA records, the RBI Covid Regulatory Packages, the subsequent facility documents, the CRILC report and the Adjudicating Authority's own order dated 03.07.2025. 32. Concluding its arguments, the Appellate requested this Appellate Tribunal to set aside the Impugned Order and allow this appeal and to restore its pre-CIRP status forthwith. 33. Per contra, the Bank, the contesting respondent, denied all averments made by the Appellants as misleading and baseless. 34. The Bank submitted that the present Appeal is misconceived and devoid of merit, as the Adjudicating Authority, after considering the contractual documents, Statements of Account and other contemporaneous records, rightly satisfied itself regarding the existence of financial debt and default and admitted the Section 7 Application filed by the Bank. The Bank contended that no ground warranting interference under Section 61 of the Code has been made out by the Appellant. 35. It is the case of the Bank that Section 7 of the Code does not make the date of default a relevant consideration for admission of the application and date of default is only releva....
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....ection 7 of the Code. It was contended that the date of NPA and the date of default are distinct, and a financial creditor is required to establish the occurrence of default and that the Section 7 Application is within limitation. Accordingly, the NPA date cannot, by itself, be treated as conclusive of the date on which default occurred. 40. The bank submitted that the amended dates of default were not arbitrary but were founded upon the contractual terms governing the respective facilities. It was contended that the date of default stated in Form-1 serves, inter alia, to demonstrate when the debt became due and payable and to determine limitation, and that the relevant facilities must therefore be examined independently on the basis of their respective sanction and contractual documents. 41. With respect to the Cash Credit facility, the bank submitted that the Cash Credit facility of Rs. 52 Crores was sanctioned pursuant to the Revised Sanction Letter dated 24.06.2019. Under the Working Capital Consortium Agreement dated 18.11.2016, interest was calculated on the daily outstanding balance and debited on the last working day of every month or quarter in accordance with bankin....
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....rd. 46. In relation to the Ad-Hoc facility, the bank submitted that the facility was sanctioned under the Sanction Letter dated 26.12.2019 for a period of 90 days from the date of availment. Since Rs. 3,70,00,000/- was disbursed to the Corporate Debtor on 26.12.2019, the contractual 90-day period expired on 24.03.2020. The bank therefore contended that the entire amount became due for repayment on 24.03.2020 and that failure to repay the same constituted default on that date, which was one day before 10A window period. 47. According to the bank, the letter written by the bank on 26.03.2020 was an inadvertent error, which was subsequently clarified in its Additional Affidavit dated 30.05.2025 before the Adjudicating Authority. It was contended that an erroneous date mentioned in an isolated communication by the bank could not override the express contractual terms governing the facility, particularly when the error had been explained before the Adjudicating Authority pursuant to its order dated 25.04.2025. 48. It is the case of the Bank that in the present case, the Bank has established the existence of financial debt and default through the sanction letters governing the f....
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....efore the commencement of the period contemplated under Section 10A which commenced on 25.03.2020 as Section 10A was introduced to temporarily bar initiation of CIRP for defaults arising during the specified COVID-19 period. It applies only to a default arising during that period it does not retrospectively extinguish a default that had already occurred. 54. It is the case of the Bank in the present case, the relevant dates are: (i) Date of default for Cash Credit Facility: 10.03.2020; (ii) Date of default for Ad hoc Facility: 24.03.2020 (iii) Commencement of Section 10A period: 25.03.2020 and both defaults therefore occurred prior to the commencement of the Section 10A period. 55. The Bank stated that in the Cash Credit Facility moratorium was not applicable and was confined only to term loan. The bank pleaded that that, as per the RBI Circulars, the interest applied during the deferment period be converted into a FITL. Accordingly, the Corporate Debtor availed the said facility, and the interest applied during the period from March 2020 to August 2020 was converted into FITL. The same is evident from the FITL Sanction Letter dated 09.09.2020 and t....
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....ding. 59. The bank further submitted that the proviso to Section 7(5) of Code also gives liberty to the Adjudicating Authority to provide an opportunity to the Financial Creditor to amend/rectify the defect in the application, if required. Moreover, in the present case, the said opportunity was availed by the bank and Form-1 was amended. Consequently, the date of default was changed, and the date of default mentioned in Form-1 also corresponds with the Sanction Letters and the Statements of Account. It is further submitted that the Adjudicating Authority allowed such change vide order dated 06.05.2024. However, the said order was not challenged by the Appellant before the Appellate Authority. Section 61 of the code provides a statutory appeal against an order of the Adjudicating Authority; however, the said order was not challenged within the prescribed period and, therefore, the same attained finality. The Adjudicating Authority rightly decided the Section 7 Application on the basis of the amended application. Moreover, the Appellant, having failed to challenge the said order within the prescribed period, cannot now contend that the amendment order has merged into the final Jud....
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....o a FITL repayable by 31.03.2021. The Bank explained that the RBI thus used two distinct expressions for two distinct categories: "moratorium" for term loans and "deferment" for cash credit/overdraft facilities. This distinction is substantive, not semantic. For term loans, the moratorium shifted the repayment schedule and due dates; for cash credit/overdraft facilities, relief was confined to recovery of interest applied during the deferment period. The Appellant cannot use "COVID-19 moratorium" as a generic expression to contend that every contractual obligation under every credit facility stood suspended. Had RBI intended parity between CC/OD facilities and term loans, there was no need to separately prescribe deferment for cash credit/overdraft facilities. 64. The bank submitted that the RBI Circulars dated 27.03.2020 and 23.05.2020 provided regulatory relaxation in relation to NPA classification. According to the bank, where the account was standard as on 29.02.2020, the period from 01.03.2020 to 30.08.2020 was excluded for determining the out-of-order status, resulting in classification of the account as NPA on 29.11.2020. It is contended that such regulatory relaxation di....
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....atorium on term-loan instalments) and applied it to a Cash Credit Facility, without taking into account Paragraph 3, which specifically governs cash credit/overdraft facilities and provides only for deferment of interest recovery not moratorium. J.C. Flowers (Supra) cannot, therefore, be mechanically applied here as it treated the RBI measure as a general moratorium on the Cash Credit Facility without independently examining Paragraph 3. The distinction between "moratorium" and "deferment" determines the nature and extent of relief, and RBI consciously used different expressions and consequences for the two categories. 68. The Bank took pains to explain to us that the present case is governed by Paragraph 3, of RBI circular dated 27.03.2020 and 23.05.2020 under which only the recovery of interest applied during the deferment period was deferred. The obligation to service the interest under the Cash Credit Facility was to be serviced by 10.03.2020 in respect of the interest applied on 29.02.2020, and the Corporate Debtor's failure to discharge the said liability constitutes a default which did not arise during the period covered by Section 10A or during any moratorium. The mo....
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....ontemporaneous evidence to establish default. Moreover, as per Regulation 20A of the IBBI (Information Utilities) Regulations, the Information Utility is only to ascertain the default and to see whether the said default was ever disputed by the Corporate Debtor or not. In the present case, the Corporate Debtor never disputed the existence of the default. It is pertinent to note that the IU is not the sole document to examine the date of default, and the date of default can be examined from the other documents as well. 72. The bank has relied upon duly certified Statements of Account and the contractual documents governing the facilities to establish debt and default. The date reflected in the Information Utility/NPA record cannot be treated as the sole determinant where the underlying contractual and banking records establish different date of default. The bank stated that in Vijay Kumar Singhania v. Bank of Baroda & Anr., 2023 SCC OnLine NCLAT 2320, this Appellate Tribunal held that the absence, of an Information Utility record does not by itself defeat a Section 7 application where debt and default are otherwise established from the material on record. It is settled law that t....
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....ion 10A period. These documents also demonstrate the subsistence of the outstanding liability and the other date of default. 75. The bank reiterated that in the present case, the existence of debt and default is ascertained from all the documents that were attached with the Section 7 Application. The documents establishing debt and default are :- a) Sanction Letter dated 28.11.2013; (b) Revised Sanction Letter dated 24.06.2019; (c) Sanction Letter dated 26.12.2019 for the Ad hoc Facility; (d) Statements of Account; e) the SARFAESI Section 13(2) notice; (f) the recall notice; and (g) other contemporaneous documents on record. 76. In this connection, the bank submitted that, the Hon'ble Supreme Court in Asset Reconstruction Company (India) Ltd. v. Tulip Star Hotel Ltd (2022) 234 Comp Cas 23, held that Form- 1 of a Section 7 application under the Code cannot be judged by the same standards as a plaint in a suit, and all the documents attached with the Section 7 Application are required to be looked into for establishing whether the application is filed within limitation and whether there is an acknowledgement of debt within three years. Therefore, the same principle is also ....
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.... considered by the Adjudicating Authority; and (g) that the financial debt and default stand established from the contractual documents, duly certified Statements of Account and other material on record. 80. The bank submitted that the Adjudicating Authority had considered the relevant sanction documents, Statements of Account, Deeds of Hypothecation, demand and recall notices, amended Section 7 Application and the additional affidavit of the bank officer and had, upon such consideration, concluding that financial debt and default existed outside the period contemplated under Section 10A. 81. The bank reiterated that the Impugned Judgment suffers from no error or infirmity warranting interference by this Appellate Tribunal. Concluding his arguments, the bank requested this Appellate Tribunal to dismiss the appeal. Findings 82. We note that the core controversy that arises for consideration in the present case is that whether the default(s) relied upon by the Bank, namely, (i) the default under the Cash Credit ("CC") Facility; and (ii) the default under the Ad Hoc Cash Credit Facility, occurred prior to 25.03.2020, or whether such default(s) arose during the period from ....
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....ing 25.04.2025 The Adjudicating Authority asked the Bank to file affidavit 30.05.2025 Bank filed affidavit 03.07.2025 NCLT's order records: "Ld. Counsel for the Respondent has demonstrated that the date declared by the bank i.e. 24.03.2020 is wrong. In fact, 90 days facility comes to an end on 25.03.2020 which falls within the prohibited period." Not appealed by the Bank. 16.07.2026 Impugned Judgment - Section 7 application admitted 84. Having heard all the parties, perused the records made available, we frame the following three issues to decide the present appeal. 85. ISSUES I. Issue 1: Whether the default with respect to Cash Credit occurred in 10A period or outside 10A period? II. Issue 2: Whether the default with respect to Ad-Hoc Cash Credit occurred in 10A period or outside 10A period? III. Issue 3: Other Ancillary issues related to above two issues pleaded in the appeal. 86. Since all these three issues are inter-connected, inter-dependent, we shall deal with all of these three issues in conjoint manner, hereinafter. 87. ISSUE 1- Whether the default with respect to Cash Credit occurred in 10A period or outside 1....
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....hat no demand was ever made upon the Corporate Debtor by the bank requiring payment of the specific sum allegedly due, much less the entire facility, by 10.03.2020. Reliance was placed on Clause 10 of the Working Capital Consortium Agreement dated 18.11.2016, under which the facility was stated to be "repayable only upon demand". 92. We take into cognizance that no demand was made by the bank prior to the claimed date of default by bank i.e. 10.03.2020 as the recall was raised on the corporate debtor on 02.01.2023, by the bank. 93. In the absence of any demand in terms of the Clause 10 of contractual stipulation as above, the entire outstanding could not have become immediately payable so as to constitute a default on 10.03.2020, as claimed by the bank. The interest in question fell within the RBI relief window commencing from 01.03.2020, during which recovery stood interdicted by the applicable regulatory directions until 31.08.2020. Consequently, where recovery of the amount was itself legally suspended, the requirement under Section 3(12) of the Code of non-payment of a debt that had become due and payable could not have been satisfied so as to give rise to an actionable d....
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....all deal the emphatic pleadings of the bank on RBI Circular dated 27.03.2020 and 23.05.2020, especially relying on Para 3, particularly difference between "moratorium" and "deferment". 97. For the sake of clarity, we reproduce Para 2 & 3 of both the RBI circulars dated 27.03.2020 and 23.05.2020 referred by bank, which reads as under: RBI's Circular dated 27.03.2020 2.In respect of all term loans (including agricultural term loans, retail and crop loans), all commercial banks (including regional rural banks, small finance banks and local area banks), co-operative banks, all-India Financial Institutions, and NBFCs (including housing finance companies) ("lending institutions") are permitted to grant a moratorium of three months on payment of all instalments1 falling due between March 1, 2020 and May 31, 2020. The repayment schedule for such loans as also the residual tenor, will be shifted across the board by three months after the moratorium period. Interest shall continue to accrue on the outstanding portion of the term loans during the moratorium period. 3.In respect of working capital facilities sanctioned in the form of cash credit/overdraft ("CC/OD"), len....
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....term loans, with the repayment schedule and residual tenor shifted by three months thereafter. 99. The RBI's second circular issued on 23.05.2020 did not create a new relief, as it merely extended the same package by a further period of three months. It extended the moratorium/deferment for term loan and cash credit facilities respectively, from 1 June 2020 to 31 August 2020, so that the combined relief window ran from 1 March 2020 to 31 August 2020. 100. In this background, we will attempt to ascertain meaning of the terms "Moratorium" vs. "Deferment", used in RBI Circulars. We are conscious that the RBI deliberately used two different words for two different products, and the distinction in this sense is functional, not stylistic. We observe that the term 'Moratorium' is applicable to term loans. It covers the entire amount of term loans i.e. principal, interest, EMI, bullet repayment etc. The whole repayment obligation was pushed back, and the tenor of the loan also got extended correspondingly. 101. On the other hand, the term 'Deferment' is applicable to working capital facilities (cash credit/overdraft). It is noted that since a CC/OD account has no fixed "instalment....
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...., the embargo initially running for six months and extendable up to one year. In stages it ran the full permissible course, so that the Section 10A period is uniformly treated as 25 March 2020 to 24 March 2021. Section 10A suspended initiation of CIRP under Sections 7, 9 and 10 for any default committed during this period. 104. It is significant to take into consideration the judgement of Hon'ble Supreme Court in Ramesh Kymal v. Siemens Gamesa Renewable Power (P) Ltd., (2021) 3 SCC 224, which settled two crucial points: Section 10A bars CIRP for any default occurring on or after 25 March 2020, even if the application was filed before Section 10A itself came into force on 5 June 2020, i.e., the bar is anchored to the date of default, not the date of filing, and it is treated as an absolute, permanent bar for that class of default (not merely a limitation on filing during the window). 105. Having noted the context of RBI COVID guidelines and intent of Section 10A, now we proceed to understand how the RBI Relief and Section 10A actually interact, and we are of the view that the two regimes need to be kept analytically separate, when the two are conflated: i) The RBI COV....
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....ver substituted for one another. We need to ascertain the actual date of default under Section 3(12) of the code based on the record (NeSL data, demand notice, loan account statements etc.) independent of whether the account enjoyed RBI relief or not. Subsequently, we need to determine whether that date falls within 25.03.2020-24.03.2021 and if yes, Section 10A bars the application permanently for that default in terms of Ramesh Kymal (supra) and if the default predates or postdates this window (even if the account separately enjoyed RBI moratorium/deferment), Section 10A has no application. 109. We are of the view that because deferment postpones the due date, the interest that was deferred was simply not "due and payable" under Section 3(12) of the code during 1.3.2020-31.8.2020. Thus, the bank cannot plead a default during the deferment window itself on the deferred interest as there was no debt due to default on. This is a factual and contractual point about whether debt-and-default even exists on that date. The consequence that follows, i.e. once the deferment period ends (31.8.2020) and the accumulated interest becomes payable, non-payment then gives rise to a fresh defaul....
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....01.03.2020 i.e., when it became payable." "51. Unless the debtor commits default, CIRP against him cannot be initiated under the Code. The words "Due and Payable" used in definition of "default" in section 3(12) means that the default debt must be subsisting debt. The terms 'default' is defined in Section 3(12) of the Code in very wide terms as non-payment of a 'debt' once it becomes due and payable, which includes non-payment of even part thereof or an instalment. A creditor is not only required to establish the existence of a debt but is also required to prove that the corporate debtor has defaulted in payment of the debt and if he fails to establish the same, the CIRP cannot be initiated by the Adjudicating Authority. In other words, the mere fact of a 'debt' being due and payable is not adequate to justify the initiation of CIRP at the instance of the creditor, unless the 'default' on the part of the Debtor is established." "54. We observe that as per the Code, it is for the Adjudicating Authority to satisfy himself at the stage of admission of application under Section 7 of the Code that default has occurred w.r.t. the debt was due and payable, which remains ....
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....s under: - "Delay condoned. After having heard the learned senior counsel appearing for the appellant and after perusing the impugned judgment, we find no error in the view taken by National Company Law Appellate Tribunal, Principal Bench at New Delhi. The appeal is accordingly dismissed." (Emphasis Supplied) This clearly demonstrates that the Hon'ble Supreme Court, after considering the judgment of the Appellate Tribunal and hearing the matter, passed the order on due consideration of the case, rather than summarily rejecting the appeal against the judgement of this Appellate Tribunal. 114. The core principles emerging from JC Flowers (Supra) are that Section 10A does not extinguish the underlying debt and Section 3(12) of the code requires both the elements of the debt having become "due and payable" and its non-payment; and that the creditor must establish the occurrence of a default and cannot rely merely upon the existence of a debt. These principles assume particular significance where the question is not whether the debt exists, but whether it had become actionable as a "default" during the period protected by Section 10A of the code. 115. We ar....
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....er moneys thereon at the rate or rates as may be applicable thereto as set out in the second schedule hereunder written. Failure of the borrower to repay shall entail in the borrower being treated as a defaulter and the amount due as in default involving the provisions as to defaults as hereinafter stated." (Emphasis Supplied) 119. We hold that the contractual terms remain relevant for determining whether, on 10.03.2020, the amount relied upon by the Bank had become presently payable and recoverable so as to satisfy the statutory ingredients of "default" under Section 3(12) of the code, particularly when the alleged default is sought to be placed outside the permanent bar imposed by Section 10A. Based on our detailed examination and noting all relevant documents and dates, we are unable to accept the bank's contention about correct date of default to be 10.03.2020 for cash credit facilities. This is based on the fact that this debt was not "due and payable" on relevant period especially keeping in view clause 10 of Working Capital Consortium Agreement noted above. We also note that no demand was made prior to 10.03.2020. We also note that bank converted interest into FITL of ....
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....he stipulated period of 90 days, the facility became due and payable only thereafter, thereby attracting the bar contained in Section 10A of the Code. On consideration of the material on record, the computation advanced by the Appellant merit's acceptance. The Ad Hoc Facility was availed on 26.12.2019 and the sanction terms contemplated adjustment within 90 days "from" the date of availment. Applying Section 9 of the General Clauses Act, 1897, the date of availment is required to be excluded. 123. At this stage, we take into consideration Section 9 and 10 of the General Clauses Act, 1897, which reads as under: - Sections 9-10, General Clauses Act, 1897 "Section 9: Commencement and termination of time. 9. (1) In any 1[Central Act] or Regulation made after the commencement of this Act, it shall be sufficient, for the purpose of excluding the first in a series of days or any other period of time, to use the word "from", and, for the purpose of including the last in a series of days or any other period of time, to use the word "to". (2) This section applies also to all 2[Central Acts] made after the third day of January, 1868, and to all Regulations mad....
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....e only on 26.03.2020. The said date falls squarely within the period protected by Section 10A. The consequence is not that the underlying debt stood extinguished or that no default occurred, but that such default, having arisen during the protected period, could not be relied upon for initiation of CIRP under Section 7 of the Code by the banks for this Ad Hoc Cash Credit Facilities. 128. ISSUE 3: Other Ancillary issues related to above two issues pleading in the appeal. 129. The next question is as to the evidentiary weight to be attached to the amended dates of default pleaded by the Bank. There is no dispute that, as a general proposition, a Section 7 application may be amended and additional documents may be placed on record before the final order. Section 7(3)- (5) of the Code reads as under: - "Section 7 (3) - The financial creditor shall, along with the application furnish- (a) record of the default recorded with the information utility or such other record or evidence of default as may be specified; (b) the name of the resolution professional proposed to act as an interim resolution professional; and (c) any other information as may be specified by the Boar....
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...., however, is different from the mere permissibility of amendment. What requires examination is the evidentiary weight of a substituted date which replaces the specific date of 29.11.2020 pleaded twice earlier, namely, in the original Form-1 as well as in the Information Utility/NeSL record referred to in the material on record. Significantly, the amended dates were introduced only after the Corporate Debtor specifically raised the Section 10A bar in its reply dated 29.08.2023. The subsequent dates also stand in contrast with the Bank's intervening conduct, particularly the renewal of the Working Capital Consortium Agreement on 06.11.2020 and the review/renewal of the CC facility on 19.01.2021, both subsequent to the dates of 10.03.2020 and 24.03.2020 now relied upon as the dates of default. 131. The Bank relies upon authorities including B. Prashanth Hegde v. State Bank of India, 2026 SCC OnLine SC 197 / 2026 INSC 155, Asset Reconstruction Co. (India) Ltd. v. Tulip Star Hotels Ltd., Manmohan Singh (Jain) v. State Bank of India and B.K. Educational Services (P) Ltd. v. Parag Gupta & Associates, (2019) 11 SCC 633, to contend that the date of default is not sacrosanct and that an ....
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.... ever be filed" in respect of a default arising during the protected period. The consequence of an incorrect date is, therefore, fundamentally different from a mere re-computation of limitation. The question consequently arises whether the same degree of flexibility applicable to the pleading of a default date in limitation cases can extend to a case where the precise date determines the very maintainability of the proceedings under Section 10A. The facts, as noted earlier, do not support the case of the bank on this issue. 136. The further question is whether the admission of the Section 7 application can be sustained by reference to facts or events which were not pleaded as the date of default in the amended Form-1. The Bank contends that the date of default is to be ascertained from the entire record and relies upon Asset Reconstruction Co. (India) Ltd. v. Tulip Star Hotels Ltd., Koncentric Investments Ltd. v. Standard Chartered Bank, Comp. App. (Ins) No. 911 of 2021, and Vijay Kumar Singhania v. Bank of Baroda & Anr., 2023 SCC OnLine NCLAT 2320. In this regard, reliance is placed by the bank upon the SARFAESI notice dated 29.06.2022, the recall notice dated 02.01.2023 and th....
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....g Authority has relied upon Laxmi Pat Surana (supra) to accept the Bank's amended dates of 10.03.2020 and 24.03.2020, thereby placing the alleged defaults outside the Section 10A period. Such application of the judgment, in our considered view, is not warranted on the basis of the principle stated therein. 140. We further note that Laxmi Pat Surana (supra) did not deal with Section 10A of the Code. The said case concerned limitation and guarantor liability, whereas the issue in the present case concerns the applicability of the statutory bar under Section 10A. In this regard, Ramesh Kymal v. Siemens Gamesa is a more relevant precedent concerning Section 10A. However, the Impugned Order does not refer to or consider the said decision. 141. We reiterate that the bank has all the rights to amend the section 7 application including date of default provided this is supported by the facts. As noted earlier, the sequence of events and chronology of dates do not help contentions of the bank on this account as we have found in earlier detailed discussion that the claimed dated of default in amended petition by the bank with reference to both Cash Credit Facilities and Ad Hoc Cash Cred....