The date of default can be considered as recorded in the certificate of Information Utility services instead of date of NPA – Shri M. K. Dhir Vs. Punjab National Bank – NCLAT New Delhi
NCLAT holds that it is a settled law that default is committed first and second stage comes as NPA, if it is not regularized in between the period of default and within 90 days thereafter. From the Section 3(11), 3(12), 5(7), 5(8) and Section 7 of the Code, it is very much clear that Code is a complete Act itself. What Section 7 of the Code requires that a Financial Creditor by filing an application in the requisite format can initiate CIRP against the CD when a Debt is due and payable in law and has not been paid and a default has occurred, the Adjudicating Authority is to initiate CIRP if, he finds default recorded in the Information Utility or evidence of default. So, the criteria for initiation of the CIRP under the Code is limited to three things, (i) there is a debt due and payable in law and has not been paid (ii)Default has occurred (iii) Default is recorded with the Information Utility. Here all the three criteria’s are met and hence initiation of CIRP by the Adjudicating Authority is in order. As far as issue of limitation is concerned the default has been committed on 03.09.2016 and the Application has been filed on 12.03.2019 hence, it is within a period of 3 years as required under Section 238A of the Code R/w 137 of the Limitation Act.
