# In the matter of SRS Modem Sales Ltd CP. No. 10-Hry-2017

> NCLT judgment dated 2017-04-17. Citation: TCN-2017-NCLT-00898. The case pertains to an application filed by SRS Modem Sales Limited, the 'Corporate Debtor',…

- **Court:** NCLT
- **Order date:** 17 Apr 2017
- **Citation:** TCN-2017-NCLT-00898
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/srs-modem-sales-ltd-cp-no-10-hry-2017-7bc31630

## Summary

### Background

The case pertains to an application filed by SRS Modem Sales Limited, the 'Corporate Debtor', under Section 10 of the Insolvency and Bankruptcy Code, 2016, for initiating Corporate Insolvency Resolution Process (CIRP). The application was filed in Form 6 as prescribed by Rule 7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The 'Corporate Debtor' sought to initiate CIRP due to defaults in payments to secured creditors, who had issued notices under Section 13(2) of the SARFAESI Act, 2002. The company's financial statements indicated significant losses and a decline in revenue. The applicant also proposed the name of Mr. Sameer Rastogi as the Interim Resolution Professional (IRP).

## Facts

SRS Modem Sales Limited, the 'Corporate Debtor', filed an application under Section 10 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP). The company was incorporated on 18.01.2007. The authorized share capital is ₹2 crores, and the paid-up capital is ₹1,69,45,240/-. The company defaulted on payments to secured creditors, including Punjab National Bank, Union Bank of India, and Vijaya Bank, leading to notices under Section 13(2) of the SARFAESI Act, 2002. The total debt raised from financial creditors amounted to ₹75 crores. The company also owed significant amounts to operational creditors. The financial statements revealed substantial losses and a decline in revenue. The company proposed Mr. Sameer Rastogi as the

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## Issues and analysis

### Issue 1: Whether the application filed by the 'Corporate Debtor' under Section 10 of the Insolvency and …

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

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**Reasoning:** The court reasoned that the 'Corporate Debtor' had committed a default in making payments

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**Interpretation:** Section 10 of the IBC is interpreted to allow a corporate debtor facing

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**Application:** The ratio and reasoning were applied to the facts of the case, where the

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## Parties

- **Judges:** R.P.Nag…
- **Respondents:** SRS Modem Sales…

## Timeline

- **2007-01-18 — Incorporation of…**: The 'Applicant Company' was incorporated on this date with the Registrar of Companies,…
- **2016-09-06 — Union Bank of India…**: Union Bank of India issued a notice calling upon the Applicant to pay more than 40…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5 — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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