Pranav B Prem

The National Company Law Tribunal (NCLT) Mumbai Bench has admitted an insolvency plea filed by Unaprime Investment Advisors Private Limited against Pune-based electric vehicle (EV) startup Tork Motors Private Limited, once backed by the late industrialist Ratan Tata, Bharat Forge, and Ola’s Bhavish Aggarwal, over a default of ₹1.29 crore. The Tribunal also appointed Anagha Anasingaraju as the Interim Resolution Professional (IRP) to oversee the Corporate Insolvency Resolution Process (CIRP).

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The Bench comprising Judicial Member Nilesh Sharma and Technical Member Sameer Kakar, in its order dated October 31, 2025, held that there existed both debt and default under the Insolvency and Bankruptcy Code, 2016 (IBC), thereby warranting initiation of the CIRP. The application was filed under Section 9 of the IBC by Unaprime, which claimed that Tork Motors failed to pay ₹1,29,34,797, comprising ₹1.15 crore towards principal dues, ₹12.11 lakh towards interest at 20.25% per annum, and ₹2.18 lakh towards GST on interest. The default date was recorded as February 5, 2024.

Background of the Dispute

Unaprime entered into an engagement agreement with Tork Motors on September 9, 2022, to assist the company in raising capital up to USD 50 million. Under the agreement, Unaprime was entitled to a 3% success fee upon successful fundraise and a 1.5% “drop-dead” fee in case Tork withdrew after signing a binding term sheet.

Pursuant to these services, Tork Motors entered into agreements with Bennett Coleman and Company Limited (BCCL) — a Share Subscription Warrant Agreement worth ₹3.25 crore and an Advertisement Agreement extending a ₹32.5 crore advertising credit line. These transactions triggered Unaprime’s entitlement to the success fee. An invoice for ₹1.15 crore was raised on January 5, 2024, payable by February 5, 2024. Despite reminders and two statutory demand notices sent on August 25, 2024, and September 4, 2024, the payment remained outstanding.

Tork Motors’ Defence

Tork Motors, represented by Advocate Pranav Shah, did not dispute the operational debt or the services rendered by Unaprime. The company admitted its liability but cited acute financial distress and the collapse of a ₹180 crore investment deal with Maxis Advisors LLP as reasons for non-payment. It contended that the failure of this deal, coupled with adverse market conditions in the EV sector, led to a liquidity crunch, forcing the suspension of operations and termination of employees in July 2024. Seeking leniency, Tork requested additional time to settle the dues, submitting that insolvency proceedings would be “commercially unviable and counterproductive.” It argued that the IBC should not be used as a debt recovery tool and relied on the NCLAT’s decision in Morex Corporation Ltd. v. Jindal Poly Films Ltd. to support its plea.

Tribunal’s Findings

After hearing both sides, the Bench observed that the existence and quantum of operational debt were admitted by Tork Motors. The Tribunal noted that Unaprime had fulfilled all procedural requirements under the IBC, including proper issuance of the statutory demand notice and proof of GST payment. Rejecting Tork Motors’ plea for additional time and reliance on financial distress, the Bench held: “The IBC does not make financial distress or intent to pay a valid defence against an otherwise admitted and defaulted debt.”

It added that while IBC is not a recovery mechanism, it squarely applies in cases where there is a clear operational debt, a default, and no pre-existing dispute. Since Tork Motors had not raised any bona fide dispute prior to the demand notice, the defence of financial hardship could not prevent the admission of the application. The Tribunal held that Unaprime had successfully demonstrated a valid and enforceable operational debt of ₹1.29 crore and a clear case of default. Accordingly, it admitted the application under Section 9 of the IBC.

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Order and Directions

The NCLT Mumbai declared a moratorium under Section 14 of the IBC, prohibiting all suits, proceedings, and enforcement actions against Tork Motors. The Bench appointed Ms. Anagha Anasingaraju (IBBI Registration No. IBBI/IPA-002/IP-N00247/2017-18/10732) as the Interim Resolution Professional to conduct the CIRP. Unaprime has been directed to deposit ₹3 lakh towards initial insolvency costs, which shall be treated as interim finance and reimbursed upon constitution of the Committee of Creditors (CoC).

Appearance

For Applicant: Advocate Rohit Gupta instructed by Advocate Shruti

For Respondent: Advocate Pranav Shah

Cause Title: Unaprime Investment Advisors Private Limited Vs Tork Motors Private Limited

Case No: C.P. (IB)/568(MB)2025

Coram: Judicial Member Nilesh Sharma, Technical Member Sameer Kakar