# In the matter of Amtek Auto Limited CA No. 142-2017 IN CP (IB) No. 42-Chd-Hry-2017_2017-11

> NCLT judgment dated 2017-10-13. Citation: TCN-2017-NCLT-00285. The case involves a petition under Section 7 of the Insolvency & Bankruptcy Code, 2016, filed…

- **Court:** NCLT
- **Order date:** 13 Oct 2017
- **Citation:** TCN-2017-NCLT-00285
- **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_2017-11-6c4bbf8c

## Summary

### Background

The case involves a petition under Section 7 of the Insolvency & Bankruptcy Code, 2016, filed by Corporation Bank (Financial Creditor) against Amtek Auto Limited (Corporate Debtor). The petition was admitted on 24.07.2017, and Mr. Dinkar Tiruvannadapuram Venkatsubramanian was appointed as Interim Resolution Professional (IRP) on 27.07.2017. A moratorium was declared under Section 14(1) of the Code. 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 bank, however, exercised its right of set-off, appropriating the funds towards the corporate debtor's dues. The IRP challenged this action, arguing it violated the moratorium.

## Facts

Corporation Bank initiated Corporate Insolvency Resolution Process (CIRP) against Amtek Auto Limited under Section 7 of the Insolvency and Bankruptcy Code, 2016. The petition was admitted on 24.07.2017, and a moratorium was declared. Mr. Dinkar Tiruvannadapuram Venkatsubramanian was appointed as the Interim Resolution Professional (IRP) on 27.07.2017. The IRP instructed Indian Overseas Bank (IOB), Hosur Branch, where Amtek Auto Limited held a current account, to freeze the account and transfer funds. IOB, however, exercised its right of set-off, appropriating ₹6.67 crores towards Amtek Auto's dues. IOB claimed that Amtek Auto had concealed the existence of this account and had falsely declared that it did not have any credit facilities with other banks. The IRP argued

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## Issues and analysis

### Issue 1: Whether the action of Indian Overseas Bank (IOB) in setting off the dues from the operational …

**Ratio:** Section 14(1)(a) of the Insolvency and Bankruptcy Code, 2016 imposes a moratorium on the

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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(1)(a) and Section 17(1) of the Code suggests

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**Application:** In this case, the respondent bank's action of setting off the dues from the

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## Parties

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

## Timeline

- **2016-01-01 — Insolvency and…**: The Insolvency and…
- **2017-07-24 — Admission of…**: Petition under Section 7 of the Insolvency & Bankruptcy Code, 2016 filed by Corporation…

## 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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