# In the matter of Aeromech Technologies Private Limited CP (IB) No. 146-BB-2017

> NCLT judgment dated 2018-03-02. Citation: TCN-2018-NCLT-01757. Aeromech Technologies Private Limited filed a petition under Section 10 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 2 Mar 2018
- **Citation:** TCN-2018-NCLT-01757
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/aeromech-technologies-private-limited-cp-ib-no-146-bb-2017-d29342dc

## Summary

### Background

Aeromech Technologies Private Limited filed a petition under Section 10 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). The company, incorporated in 2006, faced financial difficulties due to adverse market conditions, leading to defaults on loan repayments to Indian Overseas Bank. The bank initiated recovery proceedings under the SARFAESI Act. Despite these challenges, the company managed some growth, but ultimately sought CIRP due to its inability to meet its obligations. The financial creditor, Indian Overseas Bank, opposed the application, arguing it was filed with ulterior motives to delay recovery measures. The corporate debtor admitted to the default and proposed Ms. Chitra Srinivas as the

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## Facts

Aeromech Technologies Private Limited, incorporated on 01.12.2006, faced financial difficulties due to sluggish market conditions starting in 2015-16. The company had obtained credit facilities from Indian Overseas Bank amounting to Rs.8.95 crores, including a term loan and working capital. Two prime customers placed orders for 5 machines but kept the orders on hold, failing to release promised advances. The company defaulted on repayments, leading to its account being classified as a Non-Performing Asset (NPA). The bank initiated SARFAESI proceedings, demanding Rs.7,32,95,228/- as on 20.01.2016 and issuing possession notices. Despite this, the company managed to pay Rs.103.50 lakhs till the date of filing the petition. The company's turnover reduced from Rs.3.90

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## Issues and analysis

### Issue 1: Whether the corporate applicant is eligible to file an application under Section 10 of the …

**Ratio:** Section 10 of the IBC allows a corporate debtor to initiate CIRP if it has committed a

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**Reasoning:** The NCLT noted that the financial creditor did not plead that the application was not

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**Interpretation:** Section 10 of the IBC grants the corporate debtor the right to initiate CIRP

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**Application:** The NCLT found that the corporate applicant met the requirements of Section 10

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## Parties

- **Judges:** Ratakonda…; Ashok Kumar…; +1 more
- **Respondents:** Aeromech Technolog…

## Timeline

- **2006-12-01 — Incorpor…**: The Corporate applicant…
- **2007-01-01 — Commencement of…**: The Corporate Debtor Company commenced…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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