# In the matter of Amtek Auto Limited CA No. 142-2017 IN CP (IB) No. 42-Chd-Hry-2017

> NCLT judgment dated 2017-10-13. Citation: TCN-2017-NCLT-00283. The case involves a petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016…

- **Court:** NCLT
- **Order date:** 13 Oct 2017
- **Citation:** TCN-2017-NCLT-00283
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/amtek-auto-limited-ca-no-142-2017-in-cp-ib-no-42-chd-hry-2017-4533ef8f

## Summary

### Background

The case involves a petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 by Corporation Bank (Financial Creditor) against Amtek Auto Limited (Corporate Debtor). The petition was admitted, and an Interim Resolution Professional (IRP), Mr. Dinkar Tiruvannadapuram Venkatsubramanian, was appointed. The IRP instructed Indian Overseas Bank (Hosur Branch), a financial creditor of the corporate debtor, to freeze all debit transactions in the corporate debtor's account. However, the bank exercised its right of set-off and appropriated the amount towards dues payable by the corporate debtor. The IRP filed an application seeking directions to the bank to refund the appropriated amount, alleging violation of the moratorium declared under Section 14 of the

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## Facts

Corporation Bank filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 against Amtek Auto Limited, which was admitted on 24.07.2017. Mr. Dinkar Tiruvannadapuram Venkatsubramanian was appointed as the Interim Resolution Professional (IRP) on 27.07.2017. The IRP instructed Indian Overseas Bank (Hosur Branch), a financial creditor with 4.08% of the total financial debt, to freeze the corporate debtor's accounts. The IRP sent emails on 31.07.2017 and 05.08.2017 to the bank regarding the commencement of CIRP and instructions to freeze debit transactions. The IRP also requested the bank to register a change in signatory and transfer funds to the corporate debtor's account. The bank did not comply. The bank, on 31.08.2017, informed the IRP that the

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## Issues and analysis

### Issue 1: Whether the action of the respondent bank in setting off the dues from the operational collections …

**Ratio:** The legal principle is that during the moratorium period under Section 14 of the IBC,

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**Reasoning:** The court reasoned that any amount lying in the current account of the corporate debtor

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**Interpretation:** The interpretation of Section 14 and Section 3(31) of the Code is crucial. The

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**Application:** In this case, the court found that the bank's action of setting off the dues

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## Parties

- **Judges:** R.P.Nag…
- **Appellants:** Corporatio…
- **Respondents:** Amtek Auto…; Indian Overseas…

## Timeline

- **2016-01-01 — Insolvency and…**: The Insolvency and…
- **2013-10-01 — Account O…**: Corporate Debtor opened a current account with the Hosur branch of Indian Overseas Bank…

## 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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