The "date of default" is a crucial concept under the Insolvency and Bankruptcy Code, 2016 (IBC)

 The "date of default" is a crucial concept under the Insolvency and Bankruptcy Code, 2016 (IBC) because it determines whether an insolvency application is admissible and within the limitation period.

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🔍 What is the Date of Default?

The “date of default” is the date on which the corporate debtor fails to pay the debt when it becomes due and payable, and continues to remain unpaid.

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🏛️ Statutory Relevance:

1. Section 7 (Financial Creditors) and

2. Section 9 (Operational Creditors)

Both require that a default must have occurred before an application for Corporate Insolvency Resolution Process (CIRP) can be admitted.

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✅ Why Is the Date of Default Important?

Reason	Explanation
1. Trigger for initiating CIRP	No application under Section 7 or 9 can be admitted without an established default.
2. Starts limitation period	Under the Limitation Act, 1963, a 3-year limitation applies from the date of default.
3. Determines acknowledgment	If there’s a part payment or acknowledgment before expiry of 3 years, the limitation restarts.
4. Affects admission by NCLT	If the application is filed after 3 years from default (without extension), it is time-barred.
5. Impacts computation of interest, damages	Financial implications depend on when the default occurred.

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🔑 Judicial Support:

• B.K. Educational Services v. Parag Gupta (SC, 2018):

  Limitation period of 3 years under the Limitation Act applies from the date of default, not from any other point like the date of last payment.

• Gaurav Hargovindbhai Dave v. Asset Reconstruction Co. (SC, 2019):

  Application beyond 3 years from default date is not maintainable, unless limitation is extended by acknowledgment or part-payment.

• Sesh Nath Singh v. Baidyabati Sheoraphuli Cooperative Bank (SC, 2021):

  Courts can consider exclusion or condonation of delay based on facts like incorrect forum or fraud.

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📘 Supporting Evidence to Prove Date of Default:

• Loan agreements / invoices

• Demand notice (Section 8)

• Bank statements

• Balance sheets (acknowledgment of debt)

• CIBIL/default reports

• Correspondence showing non-payment