If Bank has entered into One Time Restructuring(OTR) Proposal with Corporate Debtor, date of default for the purpose of Section 10A of IBC will be date of default in OTR proposal and not original/NPA date of default – Pradeep Madhukar More Suspended Director of Syntex Trading & Agency Pvt. Ltd. Vs. Central Bank of India – NCLAT New Delhi
Hon’ble NCLAT held that:
(i) Asset classification of the borrower has to be treated to be downgraded with effect from 29.12.2020. Clause 48 of the RBI Circular dated 06.08.2020, is thus only to be read with regard to downgrading to NPA for the relevant date and this Clause 48 is not relevant to find out event of default, which occurred under the One Time Restructuring Agreement and which is foundation of Section 7 Application.
(ii) The One Time Restructuring Agreement, which is entered between the parties, i.e., the Corporate Debtor and the Central Bank of India and is binding on the parties.
(iii) Application under Section 7 was not filed for default committed during 10A period, rather the Application was specifically filed for default committed under the OTR Agreement, which is committed on 31.03.2022, which was much subsequent to 10A period
(iv) By mentioning NAP date, i.e., 29.12.12020, which was in obedience of the Clause 48, no benefit can be made by the Appellant by contending that Application was filed for default during the 10A period.
(v) The appeal was dismissed.
