TMI Blog2023 (8) TMI 1378X X X X Extracts X X X X X X X X Extracts X X X X ..... deducted while computing the threshold? 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. In the Judgment of this Tribunal delivered in RAGHAVENDRA JOSHI VERSUS AXIS BANK LIMITED; MR. AMIT CHANDRASHEKAR PODDAR [ 2023 (8) TMI 1376 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI] it is already held that if default was committed prior to Section 10 A perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has filed the application under Section 7 claiming debt and default of Rs.1,00,59,922/-. The said amount claimed by the appellant included principle of Rs. 65 lakhs as well as interest of Rs.35,59,922/- as on 25.05.2022. 2. Notice were issued by the Adjudicating Authority to which a reply was filed by the Corporate Debtor opposing the Section 7 application, Adjudicating Authority by the impugned order rejected the application. Only reason given by the Adjudicating Authority in paragraph 2 of the order is as follows: 2. This Bench on perusal of records, noticed that, the present Company Petition was filed below the threshold limit as per the Notification issued by the Ministry of Corporate Affairs vide Notification dated 24.03.2020. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been calculated from 13.12.2019 to 23.05.2022 which also includes the interest from 14.04.2020 to 14.03.2021. It is submitted that the said period was covered by Section 10A period, hence, the interest during the aforesaid period could not have been added in Section 7 application and said interest amount if deleted from the total amount the threshold is not fulfilled. It is submitted that although adjudicating Authority has not given the detailed reason but this is the main reason for rejecting the application. 6. We have considered the submission of counsel for the appellant and perused the record. 7. Section 10A of the Insolvency Bankruptcy Code, 2016 is provides as follows: Section 10A: Suspension of initiation of corporat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent of India on 05th June, 2020 by which Section 10A was inserted into the I B Code, 2016. An Application was filed by the Corporate Debtor for dismissal of Section 9 Application, the Section 9 Application was dismissed on the ground of Section 10A. Challenging the order of the Adjudicating Authority as well as Appellate Tribunal, Appeal was filed in the Supreme Court. Argument which was advanced before the Hon'ble Supreme Court was that Section 10A having been inserted in the statute book with effect from 05th June, 2020, it shall not apply on the Applications filed prior to the said date, which argument was rejected by the Hon'ble Supreme Court and relevant observations have been made in Paragraphs 22,23 and 24 as has been noted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the interest amount which is occurring during the Section 10 A period should be excluded from computation of threshold. 10. 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. 11. In the Judgment of this Tribunal delivered in Raghavendra Joshi Vs. Axis Bank Limited we have already held that if default was committed prior to Section 10 A period, Section 10 A shall not be applicable. F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing clear admission in the present case, in letter dated September 9, 2021 where the Corporate Debtor itself has admitted that he has failed to pay interest for the quarters ending September 2019 and December 2019 thus acknowledging that it has defaulted in servicing its obligations under the DSA. 8. We, thus, are of the view that the Adjudicating Authority has after considering all relevant facts and after finding debt and default has admitted the application. The fact that before this Tribunal, the Appellant has taken four adjournments for proposing OTS and get settle with the Bank itself indicate that debt and default is not disputed. We, thus, are of the view that there is no merit in the Appeal. Appeal is dismissed. 12. If the d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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