Petition U/S 7 Of IBC Cannot Be Barred For Default Committed Prior To S.10A Period: NCLAT

The National Company Law Appellate Tribunal (NCLAT) has ruled that a petition under Section 7 of the Insolvency and Bankruptcy Code (IBC) cannot be barred for defaults committed before the period specified under Section 10A. This decision clarifies that a corporate debtor’s prior defaults, before the period of suspension under Section 10A, should not prevent creditors from initiating insolvency proceedings. The ruling is significant as it ensures that creditors can seek remedy even if the default occurred before the suspension period, helping in timely resolution of insolvency cases.