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2023 (11) TMI 481 - AT - Insolvency and BankruptcyInitiation of CIRP - Application u/s 7 admitted by NCLT - Period of limitation - Date of default - bar on account of Section 10A of IBC - the impugned order challenged on the ground that as the loan recall notice dated 20.08.2020 fell within the period of Section 10A of the Code, the Application under Section 7 was barred - HELD THAT:- On looking into the date of default as mentioned in paragraph 1.3 of the impugned order, it is clear from the Table that till February 2020, admitted amount in default was Rs.10,51,94,998/-. The emphasis made by learned Counsel for the Appellant is on the notice dated 28.08.2020, which is loan recall notice. The submission of learned Counsel for the Appellant is that loan recall notice having been issued on 20.08.2020, the entire loan became due only consequent to loan recall notice, which loan recall notice having been issued on 20.08.2020, i.e., during 10A period, the application was clearly barred. Loan recall notice dated 28.08.2020 was addressed to Corporate Debtor as well as the Personal Guarantor. The contention advanced by the learned Counsel for the Financial Creditor to counter the above submission is on the basis of Clause 8.1 of the Loan Agreement - There is no dispute between the parties that there is admitted default in payment of interest for two consecutive months prior to 10A period, which is apparent from the Chart as extracted in paragraph 1.3 of the impugned order. Even if, no notice dated 28.08.2020 was issued by the Financial Creditor, the principal amount also became due on occurring of event of default as per Clause 8.1. The bar under Section 10A, does not apply when the default is committed prior to 10A period. The learned Counsel for the Respondent has rightly placed reliance on the judgment of this Tribunal in NARAYAN MANGAL VERSUS VATSALYA BUILDERS & DEVELOPERS PVT. LTD [2023 (8) TMI 1378 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] where after noticing the Section 10A and the judgment of the Hon’ble Supreme Court in Ramesh Kymal v. siemens Gamesa Renewable [2021 (2) TMI 394 - SUPREME COURT] where it was held that The Section 10 A provides that no application/proceedings under Section 7,9 & 10 is to be initiated for a default which is committed during Section 10A period. What is bar is initiation of proceedings when Corporate Debtor commits default in Section 10 A period. If the default is committed prior to Section 10A period and continues in the Section 10 A period the initiation of proceeding is not barred. Thus, the application filed by the Financial Creditor under Section 7 was not hit by Section 10A. Furthermore, it is admitted case of the parties that prior to commencement of 10A period, the default upto February 2020 was approximately Rs.10,51,94,998/-, which is much beyond the threshold provided for Section 7 Application - there are no good ground to interfere with the impugned order of the Adjudicating Authority admitting Section 7 Application - appeal dismissed.
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