In May 2023, NCLT Mumbai dismissed IDBI Bank’s insolvency petition against ZEEL, ruling that the alleged default fell within the protected period under Section 10A IBC). The tribunal held that IDBI Bank’s claim of ₹149.60 crore was unsustainable as ZEEL’s liability under the guarantee agreement was strictly limited to maintaining two quarters’ interest on the original sanctioned limit of ₹50 crore, not the entire outstanding amount.
It also held that the default occurred only when the bank issued its demand notice on March 5, 2021, which squarely fell within the COVID-19 moratorium period from March 25, 2020 to March 25, 2021, during which insolvency filings were barred.
The NCLT scrutinised the terms of the guarantee agreement and…
