# In the matter of AMW Autocomponent Ltd. C.P. (IB) No. 185-NCLT-AHM-2018

> NCLT judgment dated 2020-09-01. Citation: TCN-2020-NCLT-00742. Indian Overseas Bank filed a petition under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 1 Sept 2020
- **Citation:** TCN-2020-NCLT-00742
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/amw-autocomponent-ltd-cp-ib-no-185-nclt-ahm-2018-a1edbf79

## Summary

### Background

Indian Overseas Bank filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency and Bankruptcy Application to Adjudicating Authority Rules, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against AMW Auto Component Limited, the Corporate Debtor. The Corporate Debtor is an automobile component manufacturer that faced financial difficulties due to industry slowdown and working capital constraints. They proposed a one-time settlement offer, which was approved by the Joint Lenders Forum, but the funding was put on hold due to global disruptions caused by COVID-19.

## Facts

Indian Overseas Bank (Financial Creditor) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against AMW Auto Component Limited (Corporate Debtor). The Corporate Debtor, incorporated on 16.06.2009, is engaged in manufacturing and sale of automobile components. The authorized share capital of the Corporate Debtor is Rs. 50,05,00,000/-, and the paid-up share capital is Rs. 49,20,33,000/-. The total debt sanctioned by Indian Overseas Bank amounted to Rs. 13,15,19,000/- in the form of term loans and cash credit facilities. The total amount of default as on 19.12.2015 was Rs. 12,15,54,861.10/-. The Corporate Debtor submitted that they faced financial difficulties due to industry slowdown

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 7 of the Insolvency and …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency

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**Reasoning:** The Adjudicating Authority examined the documents submitted by the Financial Creditor and

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**Interpretation:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a

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**Application:** The Adjudicating Authority determined that the application was complete and

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## Parties

- **Judges:** Manorama…; Chockalingam…
- **Appellants:** Indian Overseas…
- **Respondents:** AMW AutoComponent…

## Timeline

- **2009-06-16 — Incorporation of…**: AMW Auto Component…
- **2015-12-19 — Date of D…**: The Corporate Debtor defaulted on a…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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