30 September 2026
Introduction
The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, in Siddharth Satish Katariya v. Central Bank of India Ltd. & Anr., has set aside the order admitting the Corporate Insolvency Resolution Process (“CIRP”) against Superfine Metals Pvt. Ltd. The Tribunal held that the defaults relied upon by Central Bank of India (“Bank”) fell within the period protected by Section 10A of the Insolvency and Bankruptcy Code, 2016 (“IBC”).
The decision is significant as it reiterates that the precise date on which a default actually arose is fundamental to determining the maintainability of proceedings under Section 7 of the IBC, particularly where Section 10A is invoked. The judgment also clarifies that the RBI’s COVID-19 relief measures and the statutory protection under Section 10A operate as distinct legal regimes and must be analysed independently.
Background
Central Bank of India initiated proceedings under Section 7 of the IBC against Superfine Metals Pvt. Ltd. in relation to defaults under a Cash Credit facility and an Ad Hoc Cash Credit facility. In its original Section 7 application filed in February 2023, the Bank identified November 29, 2020, as the date of default, which also corresponded with the classification of the account as an NPA. The former director of the Corporate Debtor raised the statutory bar under Section 10A, noting that the stated date of default fell within the protected period.
The Bank subsequently amended its pleadings and relied upon March 10, 2020, as the date of default for the Cash Credit facility and March 24, 2020 for the Ad Hoc facility, both preceding the commencement of the Section 10A period. Although the NCLT permitted the amendments, it kept the applicability of Section 10A open for determination on merits and subsequently admitted the Section 7 application.
The former director challenged the admission before the NCLAT, principally on the ground that the defaults relied upon by the Bank were protected by Section 10A.
Section 10A: The Statutory Framework
Section 10A was introduced during the COVID-19 pandemic to suspend initiation of CIRP in respect of specified defaults occurring during the protected period, which ultimately extended from March 25, 2020, to March 24, 2021. The proviso to Section 10A provides that no application shall ever be filed for initiation of CIRP in respect of a default occurring during the protected period. Accordingly, the provision creates a permanent bar in respect of such defaults, rather than merely postponing the filing of an insolvency application.
The Supreme Court, in Ramesh Kymal v. Siemens Gamesa Renewable Power (P) Ltd. (2021), had earlier clarified that the operation of Section 10A is determined by the date of default and not the date of filing of the insolvency application.
Analysis
The decision in Siddharth Satish Katariya underscores the importance of determining the actual date on which a default arose in proceedings under Section 7 of the IBC. In the context of Section 10A, the date of default is not merely a procedural or limitation-related consideration; it can determine whether the insolvency application itself is maintainable. Where the default arose between March 25, 2020, and March 24, 2021, the statutory bar under Section 10A operates permanently, irrespective of when the creditor subsequently seeks to initiate CIRP.
The decision also reinforces the distinction between a default arising during the protected period and a pre-existing default that merely continues thereafter. Section 10A does not protect an earlier default simply because the debt remained unpaid during the protected period. Accordingly, the determination of the date on which the debt became due and payable, and the corresponding failure to pay, assumes central importance in assessing the applicability of Section 10A.
From a creditors’ perspective, the judgment highlights the need for greater diligence in establishing and documenting the date of default before initiating proceedings under Section 7. The date pleaded in the insolvency application should be supported by contemporaneous records, including contractual repayment terms, account statements, restructuring documents, Information Utility records, NPA records and demand or recall notices. A subsequent amendment to the pleaded date of default cannot, by itself, overcome a statutory bar where the revised date is not supported by the underlying evidence.
For corporate debtors and their erstwhile management, the judgment provides an important basis to scrutinise the factual foundation of a Section 7 application where the creditor relies on a default arising around the Section 10A period. However, the protection cannot be invoked merely because the account remained unpaid during the protected period; the relevant inquiry remains whether the default itself arose during that period.
The judgment is also significant in distinguishing banking-law measures from insolvency-law consequences. RBI’s COVID-19 relief measures concerning deferment and asset classification and the statutory protection under Section 10A operate within different legal frameworks and cannot be treated as interchangeable. The existence of an NPA classification or the application of a particular RBI measure may be relevant evidence, but the question of “default” under Section 3(12) must ultimately be determined in accordance with the IBC and the underlying contractual and factual record.
From an adjudicatory perspective, the decision highlights the need for the NCLT to undertake a careful examination of the date of default where Section 10A is specifically raised. This assumes particular significance where a creditor seeks to amend its pleadings and substitute a different date of default after the applicability of Section 10A has been challenged.
Overall, the decision reinforces that Section 10A is a substantive statutory bar and not merely a temporary procedural restriction. Its application depends upon the factual determination of when the default actually arose. The judgment therefore places greater emphasis on contemporaneous documentation, consistency in pleadings and careful verification of the default date at the pre-filing stage, particularly in cases involving legacy COVID-period defaults.
Conclusion
The NCLAT’s decision in Siddharth Satish Katariya reinforces the importance of determining the actual and legally sustainable date of default when considering initiation of CIRP.
The judgment makes clear that Section 10A is not simply a temporary restriction on filing insolvency proceedings. Where a default actually arose during the protected period, the statutory prohibition is permanent. At the same time, the judgment preserves the distinction between a protected default and a pre-existing default that merely continued during the pandemic period.
For insolvency stakeholders, the decision therefore serves as an important reminder that the date of default must be established through the contractual and contemporaneous documentary record and cannot be selected merely with a view to overcoming the statutory bar under Section 10A.
The judgment is particularly relevant for financial creditors reviewing legacy COVID-period accounts and for practitioners assessing the maintainability of Section 7 applications involving defaults arising around the commencement and expiry of the Section 10A period.
