Default Under Insolvency & Bankruptcy Code, 2016

Insolvency and Bankruptcy Code, 2016 (hereinafter, 'the Code') has been envisaged as a tool to assist debt laden companies to clear their dues and start afresh after undergoing the process of revival. only if they miss this chance for revival, the liquidation process is commenced. The event which triggers the applicability of the Code is 'occurrence of default'. It is thus necessary to determine what constitutes 'default'. Section 3(12) of the Code defines 'default' as non-payment of debt when whole or any part or installment of the amount of debt has become due and payable and is not repaid by the debtor or the corporate debtor, as the case may be. The phrase 'debt has become due and payable' means that the debt is payable at the present moment.⁵ Whenever, as per the contract between the parties, debt is payable after a certain point of time or on happening of a certain event, the debt becomes due only after that point of time. Thus, if in a case, the debt is payable