# In the matter of U. N. Automobiles Pvt. Ltd.

> NCLT judgment dated 2024-08-28. Citation: TCN-2024-NCLT-00749. The case involves a company petition filed by Bank of Baroda ('Financial Creditor'/'Bank')…

- **Court:** NCLT
- **Order date:** 28 Aug 2024
- **Citation:** TCN-2024-NCLT-00749
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/u-n-automobiles-pvt-ltd-76518e8a

## Summary

### Background

The case involves a company petition filed by Bank of Baroda ('Financial Creditor'/'Bank') against M/s U.N. Automobiles Private Limited ('Corporate Debtor') under Section 7 of the Insolvency and Bankruptcy Code, 2016 ('IBC'/'Code') read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, seeking initiation of the Corporate Insolvency Resolution Process ('CIRP') due to default in repayment of an outstanding loan amount. The Corporate Debtor initially availed a credit facility from State Bank of India, which was later taken over by Bank of Baroda in 2010. The Financial Creditor granted loans amounting to Rs. 35 Crores, secured by mortgage and guarantee. The Corporate Debtor also took over a loan from Udaipur Urban Cooperative

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## Facts

M/s U.N. Automobiles Private Limited ('Corporate Debtor') availed loan facilities from Bank of Baroda ('Financial Creditor'). The Corporate Debtor defaulted in repayment, leading the Financial Creditor to file an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 ('IBC'). The Corporate Debtor initially availed a credit facility of Rs. 35 Crore from State Bank of India, later taken over by Bank of Baroda in 2010. The Financial Creditor granted loans amounting to Rs. 35 Crores, secured by mortgage and guarantee. The Corporate Debtor also took over a loan from Udaipur Urban Cooperative Bank. The parties entered into a One-Time Settlement ('OTS'), but disputes arose regarding its implementation. The Corporate Debtor challenged the termination of the

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted in repaying the loan facilities extended by the Financial …

**Ratio:** The Adjudicating Authority must be satisfied that a default has occurred before admitting

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**Reasoning:** The Adjudicating Authority considered the arguments of both parties, the relevant

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**Interpretation:** The term 'default' under Section 7 of the IBC refers to the failure to repay a

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**Application:** The Adjudicating Authority found that the Corporate Debtor had defaulted in

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## Parties

- **Judges:** Deep Chandr…; RAJEEV ME…
- **Appellants:** Bank of B…
- **Respondents:** M/s U.N. AUTOMOBIL…

## Timeline

- **1997-12-22 — Incorporation of…**: The Corporate Debtor, M/s U.N.…
- **2010-01-01 — Loan Tak…**: The Corporate Debtor approached the Financial Creditor, Bank of Baroda, for takeover of…

## 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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