An OTS agreement cannot extend the date of default – Samrat Restaurant Vs. Brewcrafts Microbrewing Pvt. Ltd. – NCLAT New Delhi
Hon’ble NCLAT held that:
(i) The date of default and acknowledgment are two different events. The date of default is not dependent on the date of acknowledgement
(ii) The purpose of Section 10A was to prevent companies from being pushed into insolvency due to temporary financial distress caused by the COVID-19 pandemic.
(iii) The Appellant’s interpretation that subsequent agreements should nullify the protection offered by Section 10A would undermine the legislative intent and open the door for Creditors to circumvent the protections offered by law.