# In the matter of Aarohi Motors Pvt. Ltd. C.P. (I.B) No. 117-10-NCLT-AHM-2017

> NCLT judgment dated 2017-09-21. Citation: TCN-2017-NCLT-00382. Aarohi Motors Private Limited filed an application under Section 10 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 21 Sept 2017
- **Citation:** TCN-2017-NCLT-00382
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/aarohi-motors-pvt-ltd-cp-ib-no-117-10-nclt-ahm-2017-cec7b818

## Summary

### Background

Aarohi Motors Private Limited filed an application under Section 10 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). The application was filed due to defaults in payments to financial creditors, including Bank of India and other unsecured creditors. The Board of Directors of Aarohi Motors passed a resolution to file the application, authorizing Shri Shashank Jayantilal Shah to sign the necessary documents. The application included details of pending litigation, financial statements, and a proposal for an Interim Resolution Professional (IRP).

## Facts

Aarohi Motors Private Limited filed an application under Section 10 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP). The company defaulted on payments to financial creditors, including Bank of India, which is a secured creditor with a default amount of Rs. 17,21,69,370/-, and other unsecured creditors. The company has 24 operational creditors with a total due of Rs. 59,55,974.16. Bank of India initiated actions under the SARFAESI Act and obtained symbolic possession of the properties. The Corporate Applicant preferred Securitisation Application No. 109 of 2015 before the Debt Recovery Tribunal, Ahmedabad and obtained stay against the BOI from taking further action under the SARFAESI Act. Sundaram Finance Ltd.

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## Issues and analysis

### Issue 1: Whether the pendency of proceedings under the SARFAESI Act or before the DRT and execution of …

**Ratio:** Section 238 of the IB Code provides an overriding effect, prioritizing the insolvency

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**Reasoning:** The Adjudicating Authority reasoned that the initiation of proceedings under the SARFAESI

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**Interpretation:** Section 238 of the IB Code is interpreted to mean that the insolvency

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**Application:** The pendency of SARFAESI proceedings and DRT cases initiated by Bank of India,

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## Parties

- **Judges:** BIKKI RAVEENDRA…
- **Respondents:** Aarohi Motors…; Bank of…

## Timeline

- **2015-03-28 — NPA Classif…**: Corporate Applicant was classified…
- **2015-09-09 — SARFAESI…**: BOI took symbolic possession of the properties on 9.9.2015 and published Possession…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 10 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-10)

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