# in the matter of Amit Spinning Industries Pvt. Ltd. IB- 131-PB-2017

> NCLT judgment dated 2017-08-01. Citation: TCN-2017-NCLT-00674. The case involves an application filed by M/s Amit Spinning Industries Ltd. under Section 10 of…

- **Court:** NCLT
- **Order date:** 1 Aug 2017
- **Citation:** TCN-2017-NCLT-00674
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/amit-spinning-industries-pvt-ltd-ib-131-pb-2017-382efadc

## Summary

### Background

The case involves an application filed by M/s Amit Spinning Industries Ltd. under Section 10 of the Insolvency and Bankruptcy Code (IBC) for initiating the Corporate Insolvency Resolution Process (CIRP). The company, incorporated in 2006, faced financial difficulties due to uncertain raw material prices, foreign currency fluctuations, and changes in government policy, leading to losses. The company had previously been declared sick by the BIFR, and UCO Bank was appointed as the operating agency. The application seeks a moratorium under Section 14 of the IBC. The company has disclosed details of its financial creditors, including Axis Bank and JM Financial Asset Reconstruction Company Pvt. Ltd., and operational creditors. The financial creditor, JM Financial ARC, stated

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## Facts

M/s Amit Spinning Industries Ltd. filed an application under Section 10 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). The company was incorporated on December 7, 2006, and is engaged in the manufacturing of textiles. The company faced financial difficulties due to uncertain raw material prices, foreign currency fluctuations, and changes in government policy, resulting in losses of Rs. 563.49 Lakhs as of June 30, 2011. The company had previously filed a reference before the BIFR and was declared sick on July 18, 2012. UCO Bank was appointed as the operating agency. Axis Bank granted a loan facility of Rs. 5365 lakhs to the Corporate Applicant in 2006. UCO Bank granted a loan facility of Rs. 1250

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## Issues and analysis

### Issue 1: Whether the Corporate Applicant, M/s Amit Spinning Industries Ltd., is entitled to file the present …

**Ratio:** Section 10 of the Insolvency and Bankruptcy Code, 2016, allows a corporate debtor to

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**Reasoning:** The court considered the fact that the Corporate Applicant had previously been declared

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**Interpretation:** Section 10 of the IBC provides an opportunity for corporate debtors facing

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**Application:** The court found that the Corporate Applicant had committed a default and was

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## Parties

- **Judges:** M. M. K…; Deepa Kr…; +1 more
- **Respondents:** M/s Amit Spinning…
- **Advocates:** Arvind…; Henna G…; +1 more

## Timeline

- **2006-12-07 — Incorporation of the…**: M/s Amit Spinning…
- **2007-12-14 — Transfer of Registered…**: The company transferred its registered…

## 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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