Gargo Motors Admitted to CIRP; NCLT Applies 2026 Section 10 Amendment to IRP Appointment
The National Company Law Tribunal’s Guwahati Bench has admitted Gargo Motors Ltd into the corporate insolvency resolution process (CIRP) on the company’s own application under Section 10 of the Insolvency and Bankruptcy Code, 2016. The order, pronounced on September 3, 2026 in CP(IB)/37/GB/2025, is notable not only because the company sought insolvency against itself, but also because the Bench applied the 2026 amendment to Section 10 while deciding who could be appointed as interim resolution professional.
What Gargo Motors told the NCLT
Gargo Motors is a public limited company incorporated in 1997 and registered in Tinsukia, Assam. The order records that it is an authorised dealer of Tata Motors Ltd and is engaged in vehicle dealership and allied activities. It had entered into an agreement with Tata Motors Finance Ltd on February 21, 2019 for promotion of Tata vehicles through a finance scheme, followed by a memorandum of understanding dated July 6, 2020 governing repayment of dealer liabilities.
The company quantified its financial debt in default at ₹1,07,60,711. The NCLT also referred to an arbitral award dated December 24, 2023 directing Gargo Motors to pay Tata Motors Finance Ltd. According to the order, adverse market conditions, reduced cash flow, mounting losses and continuing defaults left the company unable to discharge its financial and operational liabilities and commercially unable to continue operations.
GST dues were also on record
The corporate applicant disclosed one financial creditor, Tata Motors Finance Ltd, and one operational creditor, the Office of the Commissioner, Central Goods and Services Tax Department, Government of India. The record included a demand-cum-show-cause notice dated September 25, 2023 and Order-in-Original No. 26/JC/ADJ/GST/COMMR/DIB/2024-25 dated January 29, 2025. Gargo Motors had also filed a rectification application under Section 161 of the CGST Act, 2017 in relation to that order.
The Tribunal treated the financial default to Tata Motors Finance as independent of the statutory GST liabilities. It said the existence or pendency of the GST dues did not by itself bar initiation of CIRP under Section 10 once an independent financial default above the statutory threshold and the mandatory filing requirements were established. For finance and tax teams, that distinction is important: statutory dues remain relevant claims in insolvency, but their existence does not automatically prevent a corporate debtor from invoking Section 10 where a separate qualifying default exists.
Why the Section 10 application was admitted
The Bench noted that the company had placed audited financial statements for FY 2022-23, FY 2023-24 and FY 2024-25, provisional financial statements for FY 2025-26, and a statement of affairs as at July 16, 2025 on record. Its board and shareholders had both approved commencement of CIRP on May 5, 2025. The NCLT found that the ₹1.076 crore financial default exceeded the minimum amount of default under Section 4 of the Code and that the application satisfied the mandatory requirements of Section 10 read with Rule 7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016.
The Bench therefore admitted the petition and brought the statutory moratorium under Sections 13 and 14 into effect. Among other consequences, the moratorium restricts institution or continuation of proceedings against the corporate debtor, enforcement of security interests and certain transfers or disposals of the corporate debtor’s assets during CIRP, subject to the Code.
2026 amendment changed the IRP appointment
A particularly current feature of the order concerns the interim resolution professional. Gargo Motors had proposed Pratap Mukherjee. The Tribunal, however, recorded that because of the amendment to Section 10 made by the Insolvency and Bankruptcy Code (Amendment) Act, 2026 and operating from May 26, 2026, the IRP proposed by the corporate applicant could not be appointed. The Bench instead selected Ashok Kumar Agarwala from the panel of insolvency professionals provided by IBBI.
The order states that, from the date of appointment, the powers of the board of directors stand suspended and management of the company’s affairs vests in the IRP in accordance with the Code. This makes the ruling a practical post-amendment example for insolvency professionals, company advisers and finance teams dealing with a corporate debtor’s own Section 10 filing.
What professionals should take away
- Section 10 evidence matters: the Tribunal relied on the admitted financial default, arbitral award, financial statements, statement of affairs and corporate approvals.
- GST liabilities did not block admission: the NCLT treated them separately from the established financial default that triggered Section 10.
- IRP selection must reflect the amended law: the applicant’s proposed professional was not appointed because the Bench applied the 2026 amendment now in force.
- Moratorium consequences begin immediately: finance, legal, tax and compliance teams should align ongoing recovery, litigation and asset-management steps with Sections 13 and 14.
The complete NCLT order is available through IBBI’s official orders repository. Professionals relying on the ruling should read the order itself for the full procedural history and directions.
Official source: View the official source document
Key takeaway
NCLT Guwahati admitted Gargo Motors’ own Section 10 insolvency petition over a ₹1.076 crore financial default and applied the 2026 IBC amendment while appointing the IRP.
