Application U/S 9 Of IBC Cannot Be Admitted For Invoices Covered By Prohibited Period U/S 10A Of Code: NCLAT

The NCLAT ruled that applications under Section 9 of the IBC cannot be admitted for invoices covering periods prohibited under Section 10A of the Code. The case involved a creditor attempting to initiate insolvency proceedings for claims arising during the COVID-19 suspension period. The tribunal clarified that the prohibition under Section 10A is absolute and intended to provide relief to businesses affected by the pandemic. Legal analysts interpret this ruling as reinforcing the protective measures introduced during the pandemic to support corporate recovery. It ensures that creditors cannot misuse insolvency provisions for claims arising during suspended periods. The decision highlights the judiciary’s role in safeguarding the intent of legislative amendments designed to balance creditor rights with the need for economic stability during extraordinary circumstances like the pandemic.