Overstay in UK ?

Tier - 1 asks the question, if one has overstayed in UK or not ?

Technically after 1 April 2004 all applicants were asked to complete FLR(IED). But the home office stamped passports even after stay expired if application was made within 6 months. Initially FLR rule was not very clear and when I sent my passport with the Work permit application(made by employer) home office asked to apply for FLR after work-permit decision was reached.

Is this qualified as overstay ?

Overstay is any period where you were in country without a valid visa (and without Section 3(c) protection). This is irrespective of whether you subsequently got another visa.

It sounds like yours was an overstay (other regulars will chip in if I'm wrong), so you can explain your circumstances in a covering letter.