Declaration of Loan Account as NPA can be Considered as Date of Default to File Petition u/s 7 of IBC: NCLAT Rules in Favour of UBI

The NCLAT has ruled in favor of Union Bank of India (UBI) in a case where the declaration of a loan account as a Non-Performing Asset (NPA) was used as the date of default for filing a petition under Section 7 of the Insolvency and Bankruptcy Code (IBC). The ruling clarifies that the date a loan account is classified as NPA can serve as the reference point for initiating insolvency proceedings. This decision underscores the importance of timely and proper classification of loans in default and reinforces the role of IBC in addressing corporate defaults.