Holding

Section 10A, by virtue of its non‑obstante clause and purposive construction, applies retrospectively to bar any application for initiation of a CIRP concerning a default that occurred on or after 25 March 2020, even if the application was filed before the amendment came into force.

Summary

Ramesh Kymal, an operational creditor, filed a petition under Section 9 of the Insolvency and Bankruptcy Code (IBC) on 11 May 2020 alleging a default by Siemens Gamesa Renewable Power Ltd on 30 April 2020. While the petition was pending, Section 10A was inserted into the IBC by the 2020 amendment (effective 5 June 2020) to impose a six‑month embargo on initiating any corporate insolvency resolution process (CIRP) for defaults occurring on or after 25 March 2020, the date of the national lockdown due to COVID‑19. The key issue was whether Section 10A applied retrospectively to bar the already‑filed application. The Supreme Court held that the language of the provision, together with its purpose and the non‑obstante clause, makes the embargo applicable to all applications concerning defaults on or after 25 March 2020, irrespective of when the application was filed. Consequently, the appellant's petition was deemed non‑maintainable, and the Court affirmed the NCLAT’s decision. The appeal was dismissed, leaving the debt undisputed but the filing of the CIRP barred for the stipulated period.

Issues considered

The applicability of Section 10A of the IBC to an application filed under Section 9 before the amendment but concerning a default occurring on or after 25 March 2020.
Whether Section 10A is to be construed prospectively despite the language "shall be filed" and "shall ever be filed".
Whether the date of default can be back‑dated to avoid the embargo.
The interpretation of the phrase "from such date" in Section 10A.
Whether the embargo under Section 10A extinguishes the debt or merely bars the filing of a CIRP application.

Legislation cited

Act 17 of 2020 (Insolvency and Bankruptcy (Amendment) Act)s. 10A
Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016s. Rule 5
Insolvency and Bankruptcy Code, 2016s. 10, s. 10(5), s. 10A, s. 5(11), s. 5(12), s. 7(6), s. 8, s. 8(1), s. 9, s. 9(6)
Ordinance 9 of 2020 (Insolvency and Bankruptcy (Amendment) Ordinance)

Subjects

IBCSection 10ACOVID‑19retrospective legislationcorporate insolvencyembargoinitiation dateinsolvency commencement datestatutory interpretationnon‑obstante clause

Judgment

[2021] 3 S.C.R. 983 983

RAMESH KYMAL A
v.
M/S SIEMENS GAMESA RENEWABLE POWER PVT. LTD.
(Civil Appeal No. 4050 of 2020)
FEBRUARY 09, 2021 B
[DR DHANANJAYA Y. CHANDRACHUD AND
M. R. SHAH, JJ.]
Insolvency and Bankruptcy Code, 2016 – Embargo in s.10A
– Applicability of – Application u/s.9 filed before 05 June 2020, in
respect of a default which had occurred after 25 March 2020 – C
Maintainability of, in view of insertion of s.10A(inserted by Act 17
of 2020) with retrospective effect from 05 June 2020 – Application
held not maintainable by NCLT – Decision affirmed by NCLAT –
On appeal, held:Language of the provision is not always decisive
of its prospective or retrospective application rather its object must
D
also be taken into account – Expression “from such date” in s.10A
evidently refers to 25 March 2020 which was consciously provided
by the legislature since it coincides with the date on which the
national lockdown was declared due to the onset of the Covid-19
pandemic – Substantive part of s.10A is to be construed
harmoniously with the first proviso and the explanation – Expression E
“shall ever be filed” in the proviso is a clear indicator that the
intent of the legislature is to bar the institution of any application
for the commencement of the Corporate Insolvency Resolution
Process (CIRP) in respect of a default which has occurred on or
after 25 March 2020 for a period of six months, extendable up to
F
one year as notified – Conclusion of NCLAT affirmed – Interpretation
of Statutes – Harmonious, Purposive Construction.
Insolvency and Bankruptcy Code, 2016 – s.10A – Object of
– Discussed.
Insolvency and Bankruptcy Code, 2016 – ss.5(11), (12), 7(6), G
8, 9(6), 10(5) – Difference between “initiation date” and
“insolvency commencement date” – Discussed.
Insolvency and Bankruptcy Code, 2016 – ss.8(1), 9 – Date
of default –Attempt to set back the date of default from 30 April
2020 to either 21 January 2020 or 23 March 2020 –
H
983
984 SUPREME COURT REPORTS [2021] 3 S.C.R.

A Held:Untenable, as it is contrary to the disclosure made by the
appellant in the demand notice issued in pursuance of the provisions
of s.8(1) and s.9 –Insolvency and Bankruptcy (Application to
Adjudicating Authority) Rules, 2016 – r.5.
Words & Phrases:
B “shall be filed” in first proviso to s.10A–Plea of the appellant
is that the said expression indicates prospective nature of the
provision so as to apply only to the applications filed after 05 June
2020, the date on which the provision was inserted– Held: Rejected–
Insolvency and Bankruptcy Code, 2016 – s.10A.
C “from such date” in s.10A –Intention of Legislature –
Discussed – Insolvency and Bankruptcy Code, 2016 – s.10A.
Dismissing the appeal, the Court
HELD: 1.1 The attempt to set back the date of default to
either 21 January 2020 or 23 March 2020 is plainly untenable for
D
the reason that it is contrary to the disclosure made by the
appellant in the demand notice which has been issued in
pursuance of the provisions of Section 8(1) and Section 9 of the
IBC.[Para 10][990-F-G]
1.2 The financial distress caused by the outbreak of Covid-
E
19 provides the backdrop to the insertion of Section 10A. The
underlying rationale for the insertion of Section 10A has been
explained in the recitals to the Ordinance. Section 10A is prefaced
with a non-obstante provision which has the effect of overriding
Sections 7, 9 and 10. The proviso to Section 10A stipulates that
F “no application shall ever be filed” for the initiation of the CIRP
of a corporate debtor “for the said default occurring during the
said period”. The explanation which has been inserted for the
removal of doubts clarifies that Section 10A shall not apply to any
default which has been committed under Sections 7, 9 and 10
before 25 March 2020.Section 10A makes a reference to the
G
initiation of the CIRP. Clauses (11) and (12) of Section 5 of the
IBC define two distinct concepts. Section 5(11) stipulates that
the date on which a financial creditor, corporate applicant or
operational creditor makes an application to the adjudicating
authority for initiating the CIRP is the “initiation date”.
H Distinguished from this is the “insolvency commencement date”,
RAMESH KYMAL v. M/S SIEMENS GAMESA RENEWABLE POWER 985
PVT LTD.

which is the date on which the application for initiating the CIRP A
under Sections 7, 9 or 10, as the case may be, is admitted by the
Adjudicating Authority.The substantive part of Section 10A
adverts to an application for the initiation of the CIRP. It stipulates
that for any default arising on or after 25 March 2020, no
application for initiating the CIRP of a corporate debtor shall be
B
filed for a period of six months or such further period not
exceeding one year “from such date” as may be notified in this
behalf. The expression “from such date” is evidently intended
to refer to 25 March 2020 so that for a period of six months
(extendable to one year by notification) no application for the
initiation of the CIRP can be filed. The date of 25 March 2020 C
has consciously been provided by the legislature in the recitals
to the Ordinance and Section 10A, since it coincides with the
date on which the national lockdown was declared in India due to
the onset of the Covid-19 pandemic. [Para 15-17, 19-21][992-C-
D; 993-A-E, H; 994-A-C, D-E]
D
Sardar Inder Singh v. State of Rajasthan [1957] SCR
605 – relied on.
1.3 The language of the provision is not always decisive to
arrive at a determination whether the provision if applicable
prospectively or retrospectively. The onset of the Covid-19 E
pandemic is a cataclysmic event which has serious repercussions
on the financial health of corporate enterprises. The Ordinance
and the Amending Act enacted by Parliament, adopt 25 March
2020 as the cut-off date. The proviso to Section 10A stipulates
that “no application shall ever be filed” for the initiation of the
CIRP “for the said default occurring during the said period”. The F
expression “shall ever be filed” is a clear indicator that the intent
of the legislature is to bar the institution of any application for
the commencement of the CIRP in respect of a default which has
occurred on or after 25 March 2020 for a period of six months,
extendable up to one year as notified. The substantive part of G
Section 10A is to be construed harmoniously with the first proviso
and the explanation. Reading the provisions together, it is evident
that Parliament intended to impose a bar on the filing of
applications for the commencement of the CIRP in respect of a

H
986 SUPREME COURT REPORTS [2021] 3 S.C.R.

A corporate debtor for a default occurring on or after 25 March
2020; the embargo remaining in force for a period of six months,
extendable to one year. The correct interpretation of Section 10A
cannot be merely based on the language of the provision; rather
it must take into account the object of the Ordinance and the
extraordinary circumstances in which it was promulgated.
B
However, the retrospective bar on the filing of applications for
the commencement of CIRP during the stipulated period does
not extinguish the debt owed by the corporate debtor or the right
of creditors to recover it. Section 10A does not contain any
requirement that the Adjudicating Authority must launch into an
C enquiry into whether, and if so to what extent, the financial health
of the corporate debtor was affected by the onset of the Covid-19
pandemic. Parliament has stepped in legislatively because of the
widespread distress caused by an unheralded public health crisis.
Hence, the embargo contained in Section 10A must receive a
purposive construction which will advance the object which was
D
sought to be achieved by enacting the provision. [Paras 22-
25][996-B-C, G-H; 997-A-H; 999-A-B]
Swiss Ribbons (P) Ltd. v. Union of India (2019) 4 SCC
17 : [2019] 3 SCR 535 – relied on.
E Principles of Statutory Interpretation (1st edn., Lexis
Nexis 2015) by Justice G.P. Singh – referred to.
1.4 The date of the initiation of the CIRP is the date on
which a financial creditor, operational creditor or corporate
applicant makes an application to the adjudicating authority for
F initiating the process. On the other hand, the insolvency
commencement date is the date of the admission of the
application. This distinction is also evident from the provisions
of sub-section (6) of Section 7, sub-section (6) of Section 9 and
sub-section (5) of Section 10. NCLAT has explained the difference
between the initiation of the CIRP and its commencement
G succinctly. The conclusion of the NCLAT is affirmed. [Paras 26,
27][999-B-D, 1000-B]
Case Law Reference
[1957] SCR 605 relied on Para 21
H [2019] 3 SCR 535 relied on Para 25
RAMESH KYMAL v. M/S SIEMENS GAMESA RENEWABLE POWER 987
PVT LTD.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4050 A
of 2020.
From the Judgment and Order dated 19.10.2020 passed by the
National Company Law Appellate Tribunal, New Delhi in Company
Appeal (AT) (Insolvency) No. 701 of 2020.
Neeraj Kishan Kaul, Arvindh Pandian, Sr. Advs., Jeevanandham B
Rajagopal, S. Aravindan, Ms. Varsha Raghavan, Deepak Joshi and
Goutham Shivshankar, Advs. for the Appellant.
Gopal Jain, Sr. Adv., Samudra Sarangi, Azmat Hayat Amanullah,
Ms. Shruti Raina and Ms. Srishti Khare, Advs. for the Respondent.
C
The Judgment of the Court was delivered by
DR DHANANJAYA Y CHANDRACHUD, J.
1. The appellate jurisdiction of this Court under Section 62 of the
Insolvency and Bankruptcy Code, 2016 (“IBC”) has been invoked to
challenge the judgement and order of the National Company Law D
Appellate Tribunal (“NCLAT” or “Appellate Tribunal”) dated
19 October 2020. The NCLAT affirmed the decision of the National
Company Law Tribunal (“NCLT” or “Adjudication Authority”)
dated 9 July 2020, holding that in view of the provisions of Section 10A,
which have been inserted by Act 17 of 2020 (the “Amending Act”)
E
with retrospective effect from 5 June 2020, the application filed by the
appellant as an operational creditor under Section 9 was not maintainable.
2. Some of the salient facts set out in the appeal are being adverted
to in order to indicate the broad contours of the controversy. The issue
involved raises a question of law. Hence, while setting out the facts as
F
set up in the appeal, we need to clarify that the factual dispute has not
arisen for adjudication.
3. The appellant claims that a sum of INR 104,11,76,479 is due
and payable to him pursuant to his resignation “from all capacities held
by him in the respondent in accordance with the various Employment
Agreements/Incentive Agreements” entered into by him with the G
respondent during his tenure as Chairman and Managing Director. The
appellant entered into an Employment Agreement with the respondent
on 16 July 2009. Another Employment Agreement was entered into on
16 December 2013, effective from 1 January 2014, which superseded
the previous agreement. The Employment Agreement dated H
988 SUPREME COURT REPORTS [2021] 3 S.C.R.

A 16 December 2013 was coupled with an Incentive Agreement signed
on the same date. The Incentive Agreement is stated to have been
amended and restated on 17 April 2015, along with a further amendment
through a Side Letter dated 20 April 2015. Further, the new Employment
Agreement was amended through a Letter Amendment No. 1 dated
17 April 2015.
B
4. On 21 January 2020, the appellant submitted his resignation to
the respondent and its parent entity, detailing the entitlements which he
claimed under the Employment and Incentive Agreements. On
28 January 2020, the respondent acknowledged receipt of the letter of
resignation and requested the appellant to continue in employment beyond
C the 60 days’ notice period stipulated in the Employment Agreement.
According to the appellant, he agreed to continue to provide his services
to the respondent till 30 April 2020. There was an exchange of
communications between the parties and, according to the appellant,
by an email dated 27 March 2020, the respondent confirmed the
D payments which were due and payable to him under the letter of
resignation (except for point 12). The appellant is stated to have addressed
a final reminder by an email dated 27 April 2020, three days prior to the
extended notice period came to an end.
5. On 28 April 2020, a termination letter was addressed to the
E appellant. The appellant issued a demand notice on 30 April 2020 in
Form 3 of the IBC. The demand notice specified that the date of default
was 30 April 2020.
6. On 11 May 2020, the appellant filed an application1 under Section
9 of the IBC on the ground that there was a default in the payment of his
F operational dues. During the pendency of the application, an Ordinance2
was promulgated by the President of India on 5 June 2020 by which
Section 10A was inserted into the IBC. Section 10A reads as follows:
“10A. Suspension of initiation of corporate insolvency
resolution process.— Notwithstanding anything contained in
G sections 7, 9 and 10, no application for initiation of corporate
insolvency resolution process of a corporate debtor shall be filed,
for any default arising on or after 25th March, 2020 for a period

1
IBA/215/2020
2
H Ordinance 9 of 2020 (the “Ordinance”)
RAMESH KYMAL v. M/S SIEMENS GAMESA RENEWABLE POWER 989
PVT LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

of six months or such further period, not exceeding one year from A
such date, as may be notified in this behalf:
Provided that no application shall ever be filed for initiation of
corporate insolvency resolution process of a corporate debtor for
the said default occurring during the said period.
Explanation – For the removal of doubts, it is hereby clarified that B
the provisions of this section shall not apply to any default
committed under the said sections before 25th March, 2020.”
7. The respondent filed an application3 seeking the dismissal of
the appellant’s application on the basis of the newly inserted provisions
of Section 10A. The NCLT upheld the submission of the respondent, C
holding that a bar has been created by the newly inserted provisions of
Section 10A. This decision has been upheld in appeal by the NCLAT.
8. The issue which falls for determination in this appeal is whether
the provisions of Section 10A stand attracted to an application under
Section 9 which was filed before 5 June 2020 (the date on which the D
provision came into force) in respect of a default which has occurred
after 25 March 2020. Before proceeding to discuss the rival submissions,
it is necessary to preface the discussion with reference to three significant
dates which have a bearing on the present proceedings:
• 30 April 2020 – date of default as set up in Form 3; E
• 11 May 2020 – date of institution of the application under Section
9; and
• 5 June 2020 – date on which Section 10A was inserted in the
IBC.
F
9. The date of default is crystalized as 30 April 2020 in the demand
notice issued by the appellant in Form 3, which is prescribed under Rule
5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority)
Rules, 2016. The statutory form provides for a disclosure of the particulars
of the operational debt. The disclosure which has been made by the
appellant includes the amount claimed in default and the date of default, G
as tabulated below:

3
IA 395 of 2020 H
990 SUPREME COURT REPORTS [2021] 3 S.C.R.

A 2. AMOUNT CLAIMED TO BE I9N INR 104,28, 76,479/- (Indian Ruppes
DEFAULT AND THE DATE ON One Hundred and Four Crores Twenty
WHICH THE DEFAULT OCCURRED Eight Lakhs Seventy Six Thousand Four
[ATTACH THE WORKINGS FOR Hundred and Seventy Nine only) as on
COMPUTATION OF - *DEFAULT 30.04.2020 along with interest @ 18%
IN TABULAR FORM] (eighteen percent) p.a. till the date of
realisation of entire payment.)
B
10. Sub-Section(1) of Section 8 of 1BC stipulates:
“8. Insolvency resolution by operational creditor.—(1) an
operational creditor may, on the occurrence of a default, deliver a
demand notice of the unpaid operational debt or a copy of an
C
invoice demanding payment of the amount involved in the default
to the corporate debtor in such form and manner as may be
prescribed.”
Under Section 9(1), the operational creditor may file an application
before the Adjudicating Authority for initiating the Corporate Insolvency
D Resolution Process (“CIRP”), after the expiry of a period of ten days
from the date of delivery of the notice (or invoice demanding payment)
under sub-Section (1) of Section 8, if the operational creditor does not
receive payment from the corporate debtor or a notice of the dispute
under sub-Section (2) of Section 8. The appellant having specified 30
E April 2020 as the date of default, this appeal must proceed on that basis.
It is necessary to make this clear at the outset because an attempt has
been made during the course of the submissions by Mr Neeraj Kishan
Kaul, learned Senior Counsel appearing on behalf of the appellant, to
submit that though the demand notice mentions the date of default as
30 April 2020, the “actual first date of default” was 21 January 2020
F when the letter of resignation was tendered and that the “second date of
default’ was 23 March 2020 when the sixty days’ notice period from the
letter of resignation submitted by the appellant concluded. This attempt
to set back the date of default to either 21 January 2020 or 23 March
2020 is plainly untenable for the reason that it is contrary to the disclosure
G made by the appellant in the demand notice which has been issued in
pursuance of the provisions of Section 8(1) and Section 9 of the IBC.
The demand notice triggers further actions which are adopted towards
the initiation of the insolvency resolution process. The question which
needs to be resolved is whether Section 10A would stand attracted to a
situation such as the present where the application under Section 9 was
H
RAMESH KYMAL v. M/S SIEMENS GAMESA RENEWABLE POWER 991
PVT LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

filed prior to 5 June 2020, when Section 10A was inserted, and in respect A
of a default which has taken place after 25 March 2020.
11. Mr Neeraj Kishan Kaul submits that:
(i) Section 10A creates a bar to the ‘filing of applications’ under
Sections 7, 9 and 10 in relation to defaults committed on or
after 25 March 2020 for a period of six months, which can B
be extended up to one year;
(ii) The Ordinance and the Act which replaced it do not provide
for the retrospective application of Section 10A either
expressly or by necessary implication to applications which
had already been filed and were pending on 5 June 2020; C

(iii) Section 10A prohibits the filing of a fresh application in
relation to defaults occurring on or after 25 March 2020,
once Section 10A has been notified (i.e., after 5 June 2020);
(iv) Section 10A uses the expressions “shall be filed” and “shall D
ever filed” which are indicative of the prospective nature
of the statutory provision in its application to proceedings
which were initiated after 5 June 2020; and (v) The IBC
makes a clear distinction between the “initiation date” under
Section 5(11) and the “insolvency commencement date”
under Section 5(12). E
12. On the above premises, it has been submitted that Section
10A will have no application. Mr Kaul also urged that in each case it is
necessary for the Court and the tribunals to deduce as to whether the
cause of financial distress is or is not attributable to the Covid-19 pandemic.
In the present case, it was asserted that the onset of Covid-19, which F
was the reason for the insertion of Section 10A, has nothing to do with
the default of the respondent to pay the outstanding operational debt of
the appellant, which owes its existence even before the onset of the
pandemic. Hence, it has been submitted that the event of default
(30 April 2020) in the notice of demand cannot be read in isolation.
G
13. Opposing the above submissions, it has been urged by
Mr Gopal Jain, learned Senior Counsel on behalf of the respondent, that:
(i) The legislative intent in the insertion of Section 10A was
to deal with an extraordinary event, the outbreak of
H
992 SUPREME COURT REPORTS [2021] 3 S.C.R.

A Covid-19 pandemic, which led to financial distress faced by
corporate entities;
(ii) Section 10A is prefaced with a non-obstante clause which
overrides Sections 7, 9 and 10; and (iii) Section 10A provides
a cut-off date of 25 March 2020 and it is evident from the
B substantive part of the provision, as well as from the proviso
and the explanation, that no application can be filed for the
initiation of the CIRP for a default occurring on and after
25 March 2020, for a period of six months or as extended
upon a notification.
C 14. The rival submissions can now be considered.
15. The financial distress caused by the outbreak of Covid-19
provides the backdrop to the insertion of Section 10A. The underlying
rationale for the insertion of Section 10A has been explained in the recitals
to the Ordinance, which are extracted below:
D “…
AND WHEREAS COVID-19 pandemic has impacted business,
financial markets and economy all over the world, including India,
and created uncertainty and stress for business for reasons beyond
their control;
E
AND WHEREAS a nationwide lockdown is in force since
25th March, 2020 to combat the spread of COVID-19 which
has added to disruption of normal business operations;
AND WHEREAS it is difficult to find adequate number of
resolution applicants to rescue the corporate person who
F
may default in discharge of their debt obligation;
AND WHEREAS it is considered expedient to suspend under
sections 7, 9 and I 0 of the Insolvency and Bankruptcy Code,
2016 to prevent corporate persons which are experiencing
distress on account of unprecedented situation. being pushed
G into insolvency proceedings under the Court for some time;
AND WHEREAS it is considered expedient to exclude the
defaults arising on account of unprecedented situation for
the purposes of insolvency proceeding under this Code;”

H (emphasis supplied)
RAMESH KYMAL v. M/S SIEMENS GAMESA RENEWABLE POWER 993
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16. Section 10A is prefaced with a non-obstante provision which A
has the effect of overriding Sections 7, 9 and 10. Section 10A provides
that:
(i) no application for the initiation of the CIRP by a corporate
debtor shall be filed;
(ii) for any default arising on or after 25 March 2020; and B

(iii) for a period of six months or such further period not exceeding
one year from such date as may be notified in this behalf.
The proviso to Section 10A stipulates that “no application shall
ever be filed” for the initiation of the CIRP of a corporate debtor “for C
the said default occurring during the said period”. The explanation which
has been inserted for the removal of doubts clarifies that Section 10A
shall not apply to any default which has been committed under Sections
7, 9 and 10 before 25 March 2020.
17. Section 10A makes a reference to the initiation of the CIRP. D
Clauses (11) and (12) of Section 5 of the IBC define two distinct
concepts, namely:
(i) the initiation date; and
(ii) the insolvency commencement date.
18. The “initiation date” is defined in Section 5(11) in the following E
terms:
“5(11) “initiation date” means the date on which a financial creditor,
corporate applicant or operational creditor, as the case may be,
makes an application to the Adjudicating Authority for initiating
corporate insolvency resolution process;” F

The expression “insolvency commencement date” is defined in
Section 5(12) in the following terms:
“5(12) “insolvency commencement date” means the date of
admission of an application for initiating corporate insolvency G
resolution process by the Adjudicating Authority under sections 7,
9 or section 10, as the case may be:”
19. Section 5(11) stipulates that the date on which a financial
creditor, corporate applicant or operational creditor makes an application
to the adjudicating authority for initiating the CIRP is the “initiation date”.
H
994 SUPREME COURT REPORTS [2021] 3 S.C.R.

A Distinguished from this is the “insolvency commencement date”, which
is the date on which the application for initiating the CIRP under Sections
7, 9 or 10, as the case may be, is admitted by the Adjudicating Authority.
20. The substantive part of Section 10A adverts to an application
for the initiation of the CIRP. It stipulates that for any default arising on
B or after 25 March 2020, no application for initiating the CIRP of a
corporate debtor shall be filed for a period of six months or such further
period not exceeding one year “from such date” as may be notified in
this behalf. The expression “from such date” is evidently intended to
refer to 25 March 2020 so that for a period of six months (extendable to
one year by notification) no application for the initiation of the CIRP can
C be filed. The submission of the appellant is that the expression “shall
be filed” is indicative of a legislative intent to make the provision
prospective so as to apply only to those applications which were filed
after 5 June 2020 when the provision was inserted. Such a construction
cannot be accepted.
D 21. The date of 25 March 2020 has consciously been provided by
the legislature in the recitals to the Ordinance and Section 10A, since it
coincides with the date on which the national lockdown was declared in
India due to the onset of the Covid-19 pandemic. In Sardar Inder Singh
vs State of Rajasthan4, the Rajpramukh promulgated the Rajasthan
E (Protection of Tenants) Ordinance (9 of 1949) on 21 June 1949 which,
inter alia, provided for the reinstatement of tenants who had been in
occupation on 1 April 1948 but had been subsequently dispossessed.
When it was challenged before the Supreme Court, the Constitution
bench, speaking through Justice T L Venkatarama Ayyar, relied on the
recital in its preamble5 while interpreting its provisions. The Court held
F that:
‘‘11. In the present case, the preamble to the Ordinance
clearly recites the state of facts which necessitated the
enactment of the law in question, and Section 3 fixed the
duration of the Act as two years, on an understanding of the
G situation as it then existed. At the same time, it conferred a power
4
1957 SCR 605
5
“Whereas with a view to putting a check on the growing tendency of landholders to
eject or dispossess tenants from their holdings, and in the wider national interest of
increasing the production of foodgrains, it is expedient to make provisions for the
protection of tenants in Rajasthan from ejectment or dispossession from their holdings.”
H
RAMESH KYMAL v. M/S SIEMENS GAMESA RENEWABLE POWER 995
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on the Rajpramukh to extend the life of the Ordinance beyond A
that period, if the state of affairs then should require it. When
such extension is decided by the Rajpramukh and notified, the
law that will operate is the law which was enacted by the legislative
authority in respect of “place, person, laws, powers”, and it is
clearly conditional and not delegated legislation as laid down in
B
Queen v. Burah [(1877-8) 5 IA 178, 180, 194, 195] and must, in
consequence, be held to be valid…
…
(4) We shall next consider the contention that the provisions of
the Ordinance are repugnant to Article 14 of the Constitution, C
and that it must therefore be held to have become void. In the
argument before us, the attack was mainly directed against
Sections 7(1) and 15 of the Ordinance. The contention with
reference to Section 7(1) is that under that section landlords who
had tenants on their lands on April 1, 1948, were subjected to
various restrictions in the enjoyment of their rights as owners, D
while other landlords were free from similar restrictions. There
is no substance in this contention. The preamble to the
Ordinance recites that there was a growing tendency on
the part of the landholders to eject tenants, and that it was
therefore expedient to enact a law for giving them E
protection; and for granting relief to them, the Legislature
had necessarily to decide from what date the law should be
given operation, and it decided that it should be from April
1, 1948. That is a matter exclusively for the Legislature
to determine, and the propriety of that determination is not
open to question in courts. We should add that the petitioners F
sought to dispute the correctness of the recitals in the preamble.
This they clearly cannot do. Vide the observations of Holmes, J.
in Block v. Hirsh [(1920) 65 LEd 865 : (1920) 256 US 135].
12. A more substantial contention is the one based on Section
15, which authorises the Government to exempt any person or G
class of persons from the operation of the Act. It is argued that
that section does not lay down the principles on which exemption
could be granted, and that the decision ofthe matter is left to
the unfettered and uncanalised discretion of the Government, and
is therefore repugnant to Article 14. It is true that that section H
996 SUPREME COURT REPORTS [2021] 3 S.C.R.

A does not itself indicate the grounds on which exemption
could be granted, but the preamble to the Ordinance sets
out with sufficient clearness the policy of the legislature;
and as that governs Section 15 of the Ordinance, the decision of
the Government thereunder cannot be said to be unguided…”
B (emphasis supplied)
22. The language of the provision is not always decisive to arrive
at a determination whether the provision if applicable prospectively or
retrospectively. Justice G.P. Singh in his authoritative commentary on
the interpretation of statutes, Principles of Statutory Interpretation6,
C has stated that:
“In deciding the question of applicability of a particular statute to
past events, the language used is no doubt the most important
factor to be taken into account; but it cannot be stated as an
inflexible rule that use of present tense or present perfect
D tense is decisive of the matter that the statute does not
draw upon past events for its operation. Thus, the words “a
debtor commits an act of bankruptcy” were held to apply to acts
of bankruptcy committed before the operation of the Act. The
words “if a person has been convicted” were construed to include
anterior convictions. The words “has made”, “has ceased”, “has
E failed” and “has become”, may denote events happening before
or after coming into force of the statute and all that is necessary
is that the event must have taken place at the time when action on
that account is taken under the statute……And the word “is”
though normally referring to the present often has a future meaning
F and may also have a past signification in the sense of “has been.
The real issue in each case is as to the dominant intention
of the Legislature to be gathered from the language used,
the object indicated, the nature of rights affected, and the
circumstances under which the statute is passed.”

G (emphasis supplied)
23. Adopting the construction which has been suggested by the
appellant would defeat the object and intent underlying the insertion of
Section 10A. The onset of the Covid-19 pandemic is a cataclysmic event

6
H . G.P. Singh, Principles of Statutory Interpretation (1st edn., Lexis Nexis 2015)
RAMESH KYMAL v. M/S SIEMENS GAMESA RENEWABLE POWER 997
PVT LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

which has serious repercussions on the financial health of corporate A
enterprises. The Ordinance and the Amending Act enacted by
Parliament, adopt 25 March 2020 as the cut-off date. The proviso to
Section 10A stipulates that “no application shall ever be filed” for the
initiation of the CIRP “for the said default occurring during the said
period”. The expression “shall ever be filed” is a clear indicator that
B
the intent of the legislature is to bar the institution of any application
for the commencement of the CIRP in respect of a default which has
occurred on or after 25 March 2020 for a period of six months, extendable
up to one year as notified. The explanation which has been introduced to
remove doubts places the matter beyond doubt by clarifying that the
statutory provision shall not apply to any default before 25 March 2020. C
The substantive part of Section 10A is to be construed harmoniously
with the first proviso and the explanation. Reading the provisions together,
it is evident that Parliament intended to impose a bar on the filing of
applications for the commencement of the CIRP in respect of a corporate
debtor for a default occurring on or after 25 March 2020; the embargo
D
remaining in force for a period of six months, extendable to one year.
Acceptance of the submission of the appellant would defeat the very
purpose and object underlying the insertion of Section 10A. For, it would
leave a whole class of corporate debtors where the default has occurred
on or after 25 March 2020 outside the pale of protection because the
application was filed before 5 June 2020. E
24. We have already clarified that the correct interpretation of
Section 10A cannot be merely based on the language of the provision;
rather it must take into account the object of the Ordinance and the
extraordinary circumstances in which it was promulgated. It must be
noted, however, that the retrospective bar on the filing of applications F
for the commencement of CIRP during the stipulated period does not
extinguish the debt owed by the corporate debtor or the right of creditors
to recover it.
25. Section 10A does not contain any requirement that the
Adjudicating Authority must launch into an enquiry into whether, and G
if so to what extent, the financial health of the corporate debtor was
affected by the onset of the Covid-19 pandemic. Parliament has stepped
in legislatively because of the widespread distress caused by an
unheralded public health crisis. It was cognizant of the fact that resolution
applicants may not come forth to take up the process of the resolution
H
998 SUPREME COURT REPORTS [2021] 3 S.C.R.

A of insolvencies (this as we have seen was referred to in the recitals to
the Ordinance), which would lead to instances of the corporate debtors
going under liquidation and no longer remaining a going concern. This
would go against the very object of the IBC, as has been noted by a
two-Judge bench of this Court in its judgment in Swiss Ribbons (P)
Ltd. v. Union of India7. Speaking through Justice Rohinton F Nariman,
B
the Court held as follows:
“27. As is discernible, the Preamble gives an insight into what is
sought to be achieved by the Code. The Code is first and7 (2019)
4 SCC 17foremost, a Code for reorganisation and insolvency
resolution of corporate debtors. Unless such reorganisation is
C effected in a time-bound manner, the value of the assets of such
persons will deplete. Therefore, maximisation of value of the assets
of such persons so that they are efficiently run as going concerns
is another very important objective of the Code. This, in turn, will
promote entrepreneurship as the persons in management of the
D corporate debtor are removed and replaced by entrepreneurs.
When, therefore, a resolution plan takes off and the corporate
debtor is brought back into the economic mainstream, it is able to
repay its debts, which, in turn, enhances the viability of credit in
the hands of banks and financial institutions. Above all, ultimately,
the interests of all stakeholders are looked after as the corporate
E debtor itself becomes a beneficiary of the resolution scheme—
workers are paid, the creditors in the long run will be repaid in
full, and shareholders/investors are able to maximise their
investment. Timely resolution of a corporate debtor who is in the
red, by an effective legal framework, would go a long way to
F support the development of credit markets. Since more investment
can be made with funds that have come back into the economy,
business then eases up, which leads, overall, to higher economic
growth and development of the Indian economy. What is
interesting to note is that the Preamble does not, in any manner,
refer to liquidation, which is only availed of as a last resort if there
G is either no resolution plan or the resolution plans submitted are
not up to the mark. Even in liquidation, the liquidator can sell the
business of the corporate debtor as a going concern. (See

7
H (2019) 4 SCC 17
RAMESH KYMAL v. M/S SIEMENS GAMESA RENEWABLE POWER 999
PVT LTD. [DR DHANANJAYA Y CHANDRACHUD, J.]

ArcelorMittal [ArcelorMittal (India) (P) Ltd. v. Satish Kumar A
Gupta, (2019) 2 SCC 1] at para 83, fn 3).”
Hence, the embargo contained in Section 10A must receive a
purposive construction which will advance the object which was sought
to be achieved by enacting the provision. We are therefore unable to
accept the contention of the appellant. B
26. The date of the initiation of the CIRP is the date on which a
financial creditor, operational creditor or corporate applicant makes an
application to the adjudicating authority for initiating the process. On
the other hand, the insolvency commencement date is the date of the
admission of the application. This distinction is also evident from the C
provisions of sub-section (6) of Section 7, sub-section (6) of Section 9
and sub-section (5) of Section 10. Section 7 deals with the initiation of
the CIRP by a financial creditor; Section 8 provides for the insolvency
resolution by an operational creditor; Section 9 provides for the application
for initiation of the CIRP by an operational creditor; and Section 10
provides for the initiation of the CIRP by a corporate applicant. NCLAT D
has explained the difference between the initiation of the CIRP and its
commencement succinctly, when it observed:
“13. Reading the two definition clauses in juxtaposition, it emerges
that while the first viz. ‘initiation date’ is referable to filing of
application by the eligible applicant, the later viz. ‘commencement E
date’ refers to passing of order of admission of application by the
Adjudicating Authority. The ‘initiation date’ ascribes a role to the
eligible applicant whereas the ‘commencement date rests upon
exercise of power vested in the Adjudicating Authority. Adopting
this interpretation would leave no scope for initiation of CIRP of a F
Corporate Debtor at the instance of eligible applicant in respect
of Default arising on or after 25th March, 2020 as the provision
engrafted in Section 10A clearly bars filing of such application
by the eligible applicant for initiation of CIRP of Corporate Debtor
in respect of such default. The bar created is retrospective as the
cut-off date has been fixed as 25th March, 2020 while the newly G
inserted Section 10A introduced through the Ordinance has come
into effect on 5th June, 2020. The object of the legislation has
been to suspend operation of Sections 7, 9 & 10 in respect of
defaults arising on or after 25th March, 2020 i.e. the date on which
Nationwide lockdown was enforced disrupting normal business H
1000 SUPREME COURT REPORTS [2021] 3 S.C.R.

A operations and impacting the economy globally. Indeed, the
explanation removes the doubtby clarifying that such bar shall not
operate in respect of any default committed prior to 25th March,
2020.”
27. We are in agreement with the view which has been taken by
B the NCLAT for the reasons which have been set out earlier in the course
of this judgment. We affirm the conclusion of the NCLAT. The appeal
is accordingly dismissed. There shall be no order as to costs.
28. Pending application(s), if any, stand disposed of.

C
Divya Pandey Appeal dismissed.

D

E

F

G

H