# In the matter of Sundaram Mahadeo Autoworld Private Limited CP (IB) No. 26-GB-2022

> NCLT judgment dated 2023-01-20. Citation: TCN-2023-NCLT-04980. The case pertains to an application filed under Section 10 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 20 Jan 2023
- **Citation:** TCN-2023-NCLT-04980
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sundaram-mahadeo-autoworld-private-limited-cp-ib-no-26-gb-2022-641c25af

## Summary

### Background

The case pertains to an application filed under Section 10 of the Insolvency and Bankruptcy Code (IBC), 2016 by M/s. Sundaram Mahadeo Autoworld Private Limited, the Corporate Debtor/Petitioner, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against itself. The company, incorporated on May 29, 2015, is engaged in the business of buying, selling, importing, exporting, hiring, assembling, altering, improving, servicing, repairing, and dealing in all kinds of commercial vehicles manufactured by TATA Motors, primarily servicing the North Eastern states of India. The petitioner faced substantial diminishing profits and visible losses during the FYs 2019-20, 2020-21, and 2021-22, leading to the erosion of its entire paid-up share capital and reserves.

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## Facts

M/s. Sundaram Mahadeo Autoworld Private Limited, a company incorporated on May 29, 2015, engaged in the business of commercial vehicle dealership, filed an application under Section 10 of the Insolvency and Bankruptcy Code (IBC), 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against itself. The company faced financial difficulties, incurring cumulative losses of Rs. 1,27,86,244.35 as on 30.06.2022, eroding its entire paid-up share capital and reserves. The major financial creditor, State Bank of India (SBI), classified the petitioner's credit facilities as non-performing assets (NPA) on 08.05.2022, with total dues payable to SBI as on 30.06.2022 amounting to Rs. 6.20 Crores. Tata Capital Financial Services Limited (TCFSL) and Tata Motors

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## Issues and analysis

### Issue 1: Whether the application filed by the Corporate Debtor under Section 10 of the IBC, 2016 is complete …

**Ratio:** Section 10 of the IBC, 2016 allows a corporate debtor to initiate CIRP against itself if

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**Reasoning:** The Adjudicating Authority found that the Corporate Debtor had availed loan/credit

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**Interpretation:** Section 10 of the IBC provides a mechanism for corporate debtors facing

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**Application:** In this case, the Adjudicating Authority determined that the application filed

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## Parties

- **Judges:** Deep Chandr…; Prasanta Kumar…
- **Respondents:** M/s. Sundaram…; State Bank of…

## Timeline

- **2015-05-29 — Company Incor…**: M/s Sundaram Mahadeo Autoworld…
- **2016-03-19 — SBI Sanc…**: SBI sanctioned financial…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 11 — Persons not entitled to make application](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-11)

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