Piramal Capital & Housing ... vs Township Developers India Limited
- CitationCompany Appeal (AT) (Insolvency) No. 1628 of 2023
Ratio decidendi
The rule this decision rests on
A Section 7 application under the Insolvency and Bankruptcy Code, 2016 that claims the entire amount of default, including default occurring during the period covered by Section 10A, is barred by Section 10A and cannot be admitted in respect of that default. Where a financial creditor's application under Section 7 seeks to rely on a default that falls within the Section 10A period, the Adjudicating Authority is correct to reject the application as a whole, and the applicant is not entitled to pursue the application in respect of default occurring after the Section 10A period while the application stands as framed. Nothing in Section 10A precludes a financial creditor from filing a fresh application under Section 7 confined to default committed after the Section 10A period, which is to be considered on its own merits in accordance with law.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Piramal Capital & Housing Finance Ltd. ....Appellant Vs. Township Developers India Ltd. ...Respondent For Appellant Mr. Arun Kathpalia, Sr. Advocate with Ms. Chitra Rentala, Mr. Sourabh Rath, Ms. Kriti Srivastava, Ms. Neharika Modgil, Advocates. For Respondent
ORDER
(Hybrid Mode)
14.12.2023: Heard Shri Arun Kathpalia, Learned Senior Counsel for the Appellant.
2. This Appeal has been filed against the order dated 08.11.2023 passed by the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench-I by which order Section 7 application filed by the Appellant has been dismissed on the ground that the application is barred by Section 10A. The Adjudicating Authority has taken the view that the notice was issued in invoking guarantee on 13.02.2021 and thereafter second notice was issued on 23.06.2023. Notice of invocation having issued during 10A period i.e. 13.02.2021 against the Corporate Debtor who was the corporate guarantor, the application is clearly barred by Section 10A.
3. Learned Counsel for the Appellant submits that even after 10A period there is default committed by the Corporate Debtor in relation to debt payable under the loan agreement, hence, in view of the default subsequent to 10A period, the application was maintainable.
2 4. We have considered the submission of the Learned Counsel for the Appellant and perused the record.
5. When we look into the application under Section 7 by the Financial Creditor, it is clear that the amount claimed in Section 7 application was entire amount of default covering the default during 10A period. Application claiming debt and default during 10A period was clearly hit by Section 10A and we do not find any error in the order of the Adjudicating Authority rejecting Section 7 application.
6. Learned Counsel for the Appellant lastly contended that the Appellant is entitled to initiate proceeding confining to the default committed after 10A period. We are of the view that it is always open for the Appellant to file a fresh application confining to the default after 10A period which may be considered and decided if such application is filed in accordance with law.
7. With the aforesaid liberty, we dismiss the Appeal.
[Justice Ashok Bhushan] Chairperson
[Arun Baroka] Member (Technical) Anjali/nn
Company Appeal (AT) (Insolvency) No. 1628 of 2023
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