# In the matter of Sagar Automobiles Pvt. Ltd. C.P. (IB)-37(MP)-2021

> NCLT judgment dated 2022-08-25. Citation: TCN-2022-NCLT-01267. The case pertains to an application filed by Sagar Automobiles Pvt Ltd under Section 10 of the…

- **Court:** NCLT
- **Order date:** 25 Aug 2022
- **Citation:** TCN-2022-NCLT-01267
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sagar-automobiles-pvt-ltd-cp-ib-37mp-2021-673b1c37

## Summary

### Background

The case pertains to an application filed by Sagar Automobiles Pvt Ltd under Section 10 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Corporate Insolvency Resolution Process (CIRP). The corporate applicant, engaged in the business of selling vehicles, faced financial difficulties leading to the cessation of its business in 2017. The application was filed through its director, Mr. Yahaya Khan. The corporate applicant defaulted on loans from various financial creditors, including Punjab National Bank and Mahindra & Mahindra Financial Services Ltd.

## Facts

Sagar Automobiles Pvt Ltd, incorporated on 06.07.1995, filed an application under Section 10 of the Insolvency and Bankruptcy Code, 2016, for initiating CIRP. The company, an authorized dealer of Mahindra vehicles, ceased its business in 2017 due to financial difficulties. The company defaulted on loans from Punjab National Bank (Rs 8,12,41,460/-), Mahindra & Mahindra Finance (Rs 5,75,31,811/-), and other financial creditors, with a total default amount of Rs 22,17,96,762/- as of 18.01.2020. The company also had one operational creditor amounting to Rs 9,85,665/-. The application was filed through its director, Mr. Yahaya Khan, authorized by a Board Resolution dated 26.06.2021. The corporate applicant proposed Mr. Ashutosh Gokhale as the IRP, but later withdrew the

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## Issues and analysis

### Issue 1: Whether the application filed by the corporate applicant under Section 10 of the Insolvency and …

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

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**Reasoning:** The court noted that the corporate applicant had defaulted in paying debts to its

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**Interpretation:** Section 10 provides a mechanism for a corporate debtor to initiate CIRP when it

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**Application:** The court applied Section 10 to the facts of the case, noting that the

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## Parties

- **Judges:** Madan B.…; KAUSHALENDRA…
- **Respondents:** Sagar Automobiles…

## Timeline

- **1995-07-06 — Incorporation of…**: Sagar Automobiles Pvt Ltd was…
- **2017-01-01 — Cessation of…**: The business of the corporate applicant…

## 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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