NCLT New Delhi: Date Of Default Or Pleadings Can Be Amended At Any Stage Of The Matter Under IBC
The National Company Law Tribunal (NCLT), New Delhi Bench, comprising of Shri Bachu Venkat Balaram Das (Judicial Member) and Shri Atul Chaturvedi (Technical Member) allowed the application of the Applicant for amendment of the date of default and held that the amendment of pleadings (including date of default) in a Corporate Insolvency Resolution Process (CIRP) application filed...
The National Company Law Tribunal (NCLT), New Delhi Bench, comprising of Shri Bachu Venkat Balaram Das (Judicial Member) and Shri Atul Chaturvedi (Technical Member) allowed the application of the Applicant for amendment of the date of default and held that the amendment of pleadings (including date of default) in a Corporate Insolvency Resolution Process (CIRP) application filed under Section 7 of Insolvency and Bankruptcy Code (IBC) can be done at any stage of the matter.
Background Facts
PHL Fininvest Pvt. Ltd. (Applicant), the financial creditor filed an application under Section 7 of IBC, 2016 to initiate CIRP against Kay Jay Leasing Ltd. (Corporate Debtor) on 06.07.2021.
During the pendency of the matter, the Corporate Debtor filed an Interlocutory Application (IA1452/2023) on 13.03.2023 for dismissal of the Company Petition No. IB 359/2021 on the ground that the petition is barred by Section 10A of IBC, 2016.
Thereafter, the Applicant, filed another Interlocutory Application (IA-1547/2023) on 14.03.2023 for rectification of the date of default and both the applications were heard together on 28.07.2023.
Contentions of the Applicant:
The Applicant contended that in Part IV of Section 7 application, the date of defaults committed by the Corporate Debtor is mentioned and that the same were continuing in nature and one of the defaults had occurred on 30.09.2020. Further, various defaults also occurred even after the said date of 30.09.2020. Therefore, the Applicant seeking rectification of the date of default i.e., 30.09.2020 as mentioned in Part IV of the Section 7 application.
NCLT Verdict:
The NCLT New Delhi allowed the application of the Applicant for amendment of the date of default and held that the amendment of pleadings (including date of default) in an application filed under Section 7 of IBC can be done at any stage of the matter.
The Tribunal observed that the Corporate Debtor has defaulted and non-fulfilled its payment obligations under the Loan Agreement and the defaults are continuing in nature.
Further, it was noted that monthly payments of the interest and quarterly payments of the principal were to be made as per the Facility Agreement with the maturity of the first tranche being 31st July 2024 and the maturity of the second tranche being 31 January 2025. Non-payment of either of the above on their respective due dates will amount to an event of default giving rise to a fresh cause of action on each respective dates.
The NCLT, in conclusion, allowed the application for the date of date of default to be treated as 05.04.2021 as prayed for by the Applicant. It also pointed out that it is settled law that the amendment of pleadings in an Application filed under Section 7 of IBC can be done at any stage of the matter.
Case Title: Piramal Enterprises Ltd. v. Kay Jay Leasing
Case No.: IA-1547/2023 in IB-359(ND)/2021
Counsel for the Applicant: Mr. Krishnendu Datta, Sr. Adv.
Counsel for the Corporate Debtor: Mr. Vikas Dutta. Adv.
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