Section 10A of the IBC and COVID-Period Defaults: The NCLAT Decision in the Sporta Technologies Appeal

Section 10A of the Insolvency and Bankruptcy Code, 2016 (“IBC”) was a pandemic-era measure with a permanent effect: defaults that arose during the protected window can never found an insolvency application. Disputes about its scope continue, because creditors have argued that what matters is when the debt matured or when the demand was made, rather than when the default occurred. The National Company Law Appellate Tribunal (“NCLAT”) addressed that argument in an appeal concerning Sporta Technologies Pvt. Ltd., and the reasoning is of general application.

What Section 10A Says

Section 10A of the IBC, inserted by an Ordinance of 5 June 2020 and later enacted in the Insolvency and Bankruptcy Code (Amendment) Act, 2020, provides that no application for initiation of a corporate insolvency resolution process (“CIRP”) under Sections 7, 9 or 10 shall be filed for any default arising on or after 25 March 2020 for a period of six months, extendable by notification up to one year. Successive notifications extended the period to 24 March 2021.

The proviso states that no application shall ever be filed for initiation of a CIRP for the said default occurring during that period. The bar is therefore permanent in respect of defaults in that window, not merely a suspension.

In Ramesh Kymal v. Siemens Gamesa Renewable Power Pvt. Ltd., (2021) 3 SCC 224, the Supreme Court held that Section 10A also bars applications filed before the Ordinance came into force in respect of defaults occurring on or after 25 March 2020.

The Appeal Concerning Sporta Technologies

An operational creditor, Reward Solutions, obtained an order from the National Company Law Tribunal admitting Sporta Technologies Pvt. Ltd. into CIRP. A member of the suspended board appealed.

In Bhavit Sheth v. Madan Bajrang Lal Vaishnawa (IRP) & Anr. (NCLAT, 18 April 2024; Justice Ashok Bhushan, Chairperson, and Barun Mitra, Member (Technical)), as reported, the Appellate Tribunal set aside the order of admission. The key points in the reported reasoning are:

• The operational debt claimed fell within the Section 10A period, with the default period beginning in March 2020, even though the demand notice was issued in April 2021.
• Because the entire claim of operational debt fell within the protected period, no application could ever have been filed in respect of it.
• The fact that the corporate debtor had not taken the Section 10A plea in its reply before the Adjudicating Authority was inconsequential, because the bar is on the initiation of the application itself.
• The operational creditor was given liberty to file a fresh application for defaults occurring outside the Section 10A period and to pursue other remedies for recovery of its dues.

Why the Date of Default, not the Date of Demand, Controls

“Default” under Section 3(12) means non-payment of a debt when it has become due and payable. Section 10A is expressed by reference to the date on which the default arises. A demand notice under Section 8 is a procedural step for an operational creditor; it does not create a new default or reset the date on which the debt fell due.

The practical consequences are:

• Mixed claims. Where some invoices fell due before 25 March 2020 or after 24 March 2021, and others within the window, only the defaults outside the window can support an application. The amounts outside the window must independently satisfy the ₹1 crore minimum default under Section 4.
• The bar is jurisdictional. As the reported reasoning indicates, it operates whether or not the corporate debtor raises it, so an Adjudicating Authority may consider it at any stage.
• Other remedies survive. The bar applies to CIRP applications. A creditor may still sue, arbitrate or pursue statutory remedies for the debt, subject to limitation.

The Position After 26 May 2026

Section 10A of the IBC was not amended by the Insolvency and Bankruptcy Code (Amendment) Act, 2026, and continues to apply to defaults in the 2020–2021 window. Two related changes are relevant to applications of this kind:

• The substituted Section 7(5) and the amended Sections 9 and 10 require the Adjudicating Authority to decide within fourteen days and to record reasons for any delay. Explanation I to Section 7(5) states that where the requirements in clause (a) are met, no other ground shall be considered to reject the application. That Explanation addresses grounds for rejection where a valid default is shown; it does not authorise admission of an application that Section 10A bars outright.
• New Section 64A permits a penalty of not less than ₹1 lakh and up to ₹2 crore for initiating frivolous or vexatious proceedings, which is relevant where an application is filed in respect of a plainly barred default.

Section 10A remains relevant in another way: a default falling within the window is the one category for which the pre-packaged insolvency resolution process under Chapter III-A is available to an eligible corporate MSME even though CIRP is not.

Key Takeaways

• The protected period runs from 25 March 2020 to 24 March 2021 and the bar in respect of defaults in that period is permanent.
• The date on which the default arose is decisive; the date of the demand notice or of filing is not.
• Where a claim is wholly within the window, the application is not maintainable; where it is partly outside, only the outside portion counts, subject to the minimum default.
• Creditors retain civil, arbitral and other statutory remedies for the barred debt.

Legal Information Disclaimer

This article provides general information about Indian law as it stood on 16 September 2026. It is not legal advice, and reading it does not create an advocate–client relationship. Statutes, rules and judicial interpretations change, and their application depends on the facts of each matter. Readers should consult the current official text of the laws and judgments cited and should not act on this information without advice specific to their circumstances. This article is published for legal awareness and education and is not intended to advertise or solicit professional work.

Sources / Authorities

1. Insolvency and Bankruptcy Code, 2016 — Sections 3(12), 4, 7, 9, 10, 10A, 54A, 64A (as amended) — IBBI – Legal Framework
2. Insolvency and Bankruptcy Code (Amendment) Act, 2020; Insolvency and Bankruptcy Code (Amendment) Ordinance, 2020 dated 5 June 2020, and notifications extending the Section 10A period to 24 March 2021
3. Insolvency and Bankruptcy Code (Amendment) Act, 2026 (No. 6 of 2026) — Gazette text (IBBI)
4. Ramesh Kymal v. Siemens Gamesa Renewable Power Pvt. Ltd., (2021) 3 SCC 224, Supreme Court of India, 9 February 2021
5. Bhavit Sheth v. Madan Bajrang Lal Vaishnawa (IRP) & Anr., NCLAT, 18 April 2024 — report, IBC Laws