Narayan Mangal VS VATSALYA BUILDERS AND DEVELOPERS PRIVATE LIMITED
CA (AT) (Ins) 294 of 2023
Facts:
1.The appeal has been filed against the order dated 09.01.2023 passed by Adjudicating Authority (National Company Law Tribunal, Mumbai Bench) by which order Adjudicating Authority has rejected Section 7 application filed by the Appellant.
2.The Appellant claiming to be the Financial Creditor of the Corporate Debtor 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.
Issue: whether if the interest payments accrued during the Section 10A period the said interest amount is to be deducted while computing the threshold?
Arguments:
For Appellant:
1.Counsel for the appellant submitted that Adjudicating Authority has not given any reason as to why the threshold is not fulfilled in the Section 7 application. It is submitted that when the part-IV of the application clearly mentioned the total amount of Rs.1,00,59,922/- threshold was fully met and Adjudicating Authority committing error in rejecting the said application.
For Respondent:
1.Counsel for the respondent refuting the submission of the counsel for the appellant contends that according to own showing of the appellant the interest has 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.
Decision: NCLAT set aside the decision of NCLT.
Rationale:
1.Hon’ble NCLAT noted that Present is not a case where bar of Section 10 A has been pressed rather present is the case where submission is that the interest amount which is occurring during the Section 10 A period should be excluded from computation of threshold.
2.NCLAT 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.
3.If the default is committed prior to Section 10 A period and default continues there is no prohibition in initiating proceedings under Section 7.
Order:
