# In the matter of Best It World (India) Private Limited

> NCLT judgment dated 2024-05-22. Citation: TCN-2024-NCLT-01289. Axis Bank Limited filed a Company Petition (CP (IB) No. 383/MB/2022) under Section 7 of the…

- **Court:** NCLT
- **Order date:** 22 May 2024
- **Citation:** TCN-2024-NCLT-01289
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/best-it-world-india-private-limited-9dce8568

## Summary

### Background

Axis Bank Limited filed a Company Petition (CP (IB) No. 383/MB/2022) under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) against Best IT World (India) Private Limited, seeking to initiate Corporate Insolvency Resolution Process (CIRP). The petition was filed on 27.12.2021. Axis Bank, being the Financial Creditor (FC), claimed a default amount of Rs.36,80,69,066.83/-, including principal, interest, and penal interest. The Corporate Debtor (CD) was engaged in the business of assembling and trading computer parts and accessories. The CD had obtained credit facilities from a consortium of banks, including Axis Bank, IDBI Bank, and Cosmos Co-Operative Bank. The account of the CD was declared NPA on 10.05.2020.

## Facts

Axis Bank Limited (Financial Creditor) filed a Company Petition (CP (IB) No. 383/MB/2022) on 27.12.2021 under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) against Best IT World (India) Private Limited (Corporate Debtor). The Corporate Debtor (CD) defaulted on credit facilities obtained from a consortium of banks, including Axis Bank. The total default amount was Rs.36,80,69,066.83/-, including principal, interest, and penal interest. The CD's account was classified as Non-Performing Asset (NPA) on 10.05.2020. The Financial Creditor (FC) issued a loan recall-cum guarantee invocation notice on 10.08.2021, followed by a demand notice on 20.08.2021 under Section 13(2) of the SARFAESI Act. The CD claimed that the application is barred by Section 10A of the

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## Issues and analysis

### Issue 1: Whether the application is …

**Ratio:** Section 10A of the IBC bars the initiation of CIRP for defaults occurring during a

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**Reasoning:** The NCLT found that the date of default was 10.02.2020, which is before the COVID-19

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**Interpretation:** Section 10A is interpreted to prevent the initiation of CIRP for defaults

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**Application:** The NCLT applied the ratio to the facts and found that the default occurred

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## Parties

- **Judges:** K. R. SAJI…; SANJIV…
- **Appellants:** Axis Bank L…
- **Respondents:** Best IT World…

## Timeline

- **2020-05-10 — Account decla…**: The account of the Corporate Debtor was declared as Non-Performing Asset (NPA) by the…
- **2021-08-10 — Loan Recall…**: The Financial Creditor issued a loan recall-cum guarantee invocation notice to the…

## 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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