# in the matter of Diamond Power Transformers Ltd. CP (IB) No. 28-10-AHM-2017

> NCLT judgment dated 2017-06-06. Citation: TCN-2017-NCLT-00820. Diamond Power Transformers Ltd. filed an application under Section 10 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 6 Jun 2017
- **Citation:** TCN-2017-NCLT-00820
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/diamond-power-transformers-ltd-cp-ib-no-28-10-ahm-2017-b7daa697

## Summary

### Background

Diamond Power Transformers Ltd. filed an application under Section 10 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP). The company's director, Jayramrao Chandravadan Marathe, was authorized via a Board Resolution to file the application. The company cited defaults in payments to three secured creditors: UCO Bank, Indian Overseas Bank, and SICOM Ltd. SICOM Ltd. had initiated proceedings under the SARFAESI Act, leading Diamond Power Transformers to initiate proceedings before the DRT and obtain a stay order. The company also faced a notice from an operational creditor, AMBA Shipping & Logistics P. Ltd., for unpaid dues.

## Facts

Diamond Power Transformers Ltd. filed an application under Section 10 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP). The company defaulted on payments to three secured creditors: Indian Overseas Bank (Rs. 46.98 crores), UCO Bank (Rs. 35.86 crores), and SICOM Ltd. (Rs. 31.00 crores). SICOM Ltd. initiated SARFAESI Act proceedings, leading Diamond Power Transformers to file proceedings before the Debt Recovery Tribunal (DRT) and obtain a stay. The company received a notice from operational creditor AMBA Shipping & Logistics P. Ltd. for Rs. 13,22,051. The company's director, Jayramrao Chandravadan Marathe, was authorized to file the application. The company had previously taken a plea of no default in DRT

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## Issues and analysis

### Issue 1: Whether the application filed by Diamond Power Transformers Ltd. under Section 10 of the Insolvency …

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

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**Reasoning:** The NCLT considered the facts presented, including the defaults to financial creditors

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**Interpretation:** The interpretation of Section 10 involves determining whether a default has

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**Application:** The NCLT applied Section 10 to the facts of the case, finding that Diamond

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## Parties

- **Judges:** BIKKI RAVEENDRA…
- **Appellants:** Jayramrao…
- **Respondents:** Diamond Power…; Indian Overseas…

## Timeline

- **2017-05-05 — Board Reso…**: Diamond Power Transformers Ltd. passed a Board Resolution authorizing Mr. Jayramrao…
- **2016-08-25 — Securitisatio…**: SICOM Ltd. issued a securitisation notice under…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 10 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-10)

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