# In the matter of Torque Automotive Private Ltd. CP (IB) No. 781-7-NCLT-AHM-2019

> NCLT judgment dated 2021-02-24. Citation: TCN-2021-NCLT-02933. The case pertains to an application filed under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 24 Feb 2021
- **Citation:** TCN-2021-NCLT-02933
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/torque-automotive-private-ltd-cp-ib-no-781-7-nclt-ahm-2019-6a26b203

## Summary

### Background

The case pertains to an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, by Sampati Securities Ltd (Financial Creditor) to initiate Corporate Insolvency Resolution Process (CIRP) against Torque Automotive Private Ltd (Corporate Debtor). The financial creditor claimed a default of Rs. 19,54,22,723/- disbursed to the corporate debtor in pursuance of an agreement/MoU dated 01.04.2017.

## Facts

Sampati Securities Ltd, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP against Torque Automotive Private Ltd, the Corporate Debtor. The Financial Creditor claimed that the Corporate Debtor defaulted on a debt of Rs. 19,54,22,723/-. This amount was disbursed to the Corporate Debtor in accordance with an agreement/MoU dated 01.04.2017. The Corporate Debtor made some part-payments, but a significant amount remained outstanding. The outstanding debt became due and payable on 01.04.2019. The Financial Creditor filed the Section 7 application on 06.11.2019. The Corporate Debtor stated that its business had been closed and that it could make the payment to the Financial Creditor in 36 to 48 months.

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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, allows a financial creditor to

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**Reasoning:** The court considered the facts presented by the Financial Creditor, including the

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**Interpretation:** Section 7 provides a mechanism for financial creditors to recover their dues

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**Application:** The court applied Section 7 to the facts of the case and determined that the

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## Parties

- **Judges:** Manorama…; Virendra Kumar…
- **Appellants:** Sampati Securities…
- **Respondents:** Torque Automotive…

## Timeline

- **2017-04-01 — Agreement/M…**: Date of the agreement/MoU between the…
- **2019-04-01 — Debt Due…**: Date on which the outstanding…

## 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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