# In the matter of ADA Restaurant and Foods Pvt. Ltd. Company Appeal (AT) (Insolvency) No. 818 of 2022

> NCLAT judgment dated 2022-09-12. Citation: TCN-2022-NCLAT-00221. The appeal was filed against the order passed by the Adjudicating Authority (National Company…

- **Court:** NCLAT
- **Order date:** 12 Sept 2022
- **Citation:** TCN-2022-NCLAT-00221
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/ada-restaurant-and-foods-pvt-ltd-company-appeal-at-insolvency-no-818-of-2022-2dc37981

## Summary

### Background

The appeal was filed against the order passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi, Court-V dated 05.04.2022, which dismissed the Appellant's application under Section 10 of the I&B Code on the ground that it was barred by Section 10A of the I&B Code. The Appellant contended that the default occurred before the enforcement of Section 10A, specifically before 25.03.2020.

## Facts

ADA Restaurant and Foods Pvt. Ltd. filed an application under Section 10 of the I&B Code. The Adjudicating Authority (National Company Law Tribunal), New Delhi, dismissed the application, citing that it was barred by Section 10A of the I&B Code. The Appellant claims the default occurred before 25.03.2020, prior to the enforcement of Section 10A. The debt in default was incurred by the Corporate Applicant on an account basis and has been continuing since March 2019. The cumulative amount of debt and its default is more than one crore rupees. An amount of Rs.1,42,52,186/- became due and payable in February 2020. The Appellant submitted that as per the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2020 dated 5.6.2020, if the default to the extent of

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## Issues and analysis

### Issue 1: Whether the application filed by the Appellant under Section 10 of the I&B Code is barred by …

**Ratio:** Section 10A of the I&B Code provides a bar on initiating Corporate Insolvency

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**Reasoning:** The court reasoned that since the Appellant claimed the default occurred in February

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**Interpretation:** The interpretation of Section 10A hinges on the timing of the default. If the

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**Application:** The court applied the ratio to the facts by noting the Appellant's claim that

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## Parties

- **Judges:** Ashok Bh…; Barun M…
- **Appellants:** ADA Restaurant…

## Timeline

- **2019-03-01 — Default Com…**: The debt in default was incurred by the Corporate Applicant on an account basis and is…
- **2020-02-01 — Debt Due and…**: An amount of Rs.1,42,52,186/- became…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 10 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-10)

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