# In the matter of Axis Bank Ltd. Vs. Maharashtra Theatres Pvt. Ltd. Company Appeal (AT) (Insolvency) No. 963 of 2021

> NCLAT judgment dated 2022-03-02. Citation: TCN-2022-NCLAT-00602. This is a Company Appeal filed against the order dated 08.10.2021 passed by the Adjudicating…

- **Court:** NCLAT
- **Order date:** 2 Mar 2022
- **Citation:** TCN-2022-NCLAT-00602
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/axis-bank-ltd-vs-maharashtra-theatres-pvt-ltd-company-appeal-16d43008

## Summary

### Background

This is a Company Appeal filed against the order dated 08.10.2021 passed by the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench. The Appellant, a Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, claiming dues of Rs. 55,75,27,571/- including interest. The application was filed on 30.12.2020. The Corporate Debtor, in its reply, relied on Section 10A of the Code, submitting that since the date of default was 31.10.2020, no application for initiation of the insolvency resolution process could be filed for any default on or after 25.03.2020. The Adjudicating Authority concluded that the date of default in Form-1 was 31.10.2020 and rejected the application.

## Facts

Axis Bank Ltd., the Appellant and a Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Maharashtra Theatres Pvt. Ltd., the Corporate Debtor, claiming dues of Rs. 55,75,27,571/- including interest. The application was filed on 30.12.2020. The Corporate Debtor contended that the application was barred by Section 10A of the Code because the date of default was 31.10.2020, and no application could be filed for defaults after 25.03.2020. The Adjudicating Authority (NCLT) accepted this argument and rejected the application. Axis Bank appealed, arguing that the actual date of default was 29.01.2019, when the Corporate Debtor's account was declared NPA. The credit facility recall notice dated 11.07.2019 was also

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority erred in determining the date of default as 31.10.2020, thereby …

**Ratio:** The Adjudicating Authority must accurately determine the date of default based on the

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**Reasoning:** The court found that the Adjudicating Authority committed an error in noticing the date

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**Interpretation:** Section 10A provides a specific bar on initiating insolvency proceedings for

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**Application:** The Adjudicating Authority incorrectly applied Section 10A by taking the date

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## Parties

- **Judges:** Ashok Bh…; Alok Sriv…
- **Appellants:** Axis Ban…
- **Respondents:** Maharashtra…

## Timeline

- **2020-12-30 — Application…**: Axis Bank Ltd. filed an application under Section 7 of the Insolvency and Bankruptcy…
- **2021-10-08 — Order by Adjudicating…**: The Adjudicating Authority (NCLT) passed an order rejecting the application, concluding…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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