The Madras High Court bench comprising Justice S.S. Sundar and Justice P. Dhanabal has held that the proviso to Section 10-A of the Insolvency and Bankruptcy Code (IBC) does not extend to cases where the default continues beyond the moratorium period.
The court noted that Section 10-A only imposes a moratorium temporarily suspending the initiation of the Corporate Insolvency Resolution Process (CIRP). Section 10-A bars an application for initiation of CIRP of a Corporate Debtor, for any default arising on or after 25.03.2020 for a period of six months.
In interpreting the proviso to Section 10-A, the court held that the bar on filing CIRP applications applies only to defaults that occur within the moratorium period….
