Petition U/S Section 7 Of IBC Cannot Be Entertained Based On Guarantee Invoked During Prohibited Period U/S 10A Of IBC: NCLAT

The NCLAT ruled that a petition under Section 7 of the IBC cannot be entertained based on a guarantee invoked during the prohibited period under Section 10A of the IBC. Section 10A provides a temporary suspension of initiation of corporate insolvency resolution process (CIRP) for defaults occurring during a specific period. The NCLAT's decision clarifies that guarantees invoked during this prohibited period cannot form the basis for initiating CIRP under Section 7.