Agencies
The Mumbai bench of the National Company Law Tribunal (NCLT) has dismissed an insolvency petition filed by Unity Small Finance Bank against Awas Developers and Constructions Pvt Ltd, holding that the lender failed to establish the correct date of default and that the application was barred by limitation.The tribunal, however, clarified that the dismissal would not prevent Unity Small Finance Bank from pursuing other legal remedies, including proceedings based on subsequent developments such as the arbitral award, in accordance with law.The petition, filed under Section 7 of the Insolvency and Bankruptcy Code (IBC), sought initiation of the corporate insolvency resolution process (CIRP) against Awas Developers over an alleged default of ₹140.12 crore. The bank treated October 7, 2019-the date on which it issued a demand notice-as the date of default.Rejecting the lender’s contention, the NCLT held that a demand or recall notice cannot alter or postpone the date of default. It observed that the borrower’s account had already been classified as a non-performing asset (NPA) on August 31, 2012, and that the first default-not a subsequent recovery action-is the relevant trigger for computing limitation under the IBC.The bench also flagged inconsistencies in the bank’s pleadings, noting that three different dates of default had been cited during the proceedings-October 7, 2019 in the petition, March 31, 2019 in the NeSL Form C, and October 22, 2019 in the written submissions. It held that the petition failed to correctly identify the date of default.(You can now subscribe to our Economic Times WhatsApp channel)
NCLTAwas Developerscorporate insolvency resolution processinsolvency pleaInsolvency and Bankruptcy CodeUnity Small Finance Bankdefault date
(Catch all the Business News, Breaking News and Latest News Updates on The Economic Times.)
Subscribe to The Economic Times Prime and read the ET ePaper online.
…more
(You can now subscribe to our Economic Times WhatsApp channel)
NCLTAwas Developerscorporate insolvency resolution processinsolvency pleaInsolvency and Bankruptcy CodeUnity Small Finance Bankdefault date
(Catch all the Business News, Breaking News and Latest News Updates on The Economic Times.)
Subscribe to The Economic Times Prime and read the ET ePaper online.
…more
