# In the matter of McNally Bharat Engineering Co. Ltd. vs. Union of India & Ors.

> HC judgment dated 2024-12-19. Citation: TCN-2024-HC-00004. McNally Bharat Engineering Co. Ltd. filed a writ petition under Article 226 of the Constitution of…

- **Court:** HC
- **Order date:** 19 Dec 2024
- **Citation:** TCN-2024-HC-00004
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-new-delhi/mcnally-bharat-engineering-co-ltd-vs-union-of-india-ors-5837b19a

## Summary

### Background

McNally Bharat Engineering Co. Ltd. filed a writ petition under Article 226 of the Constitution of India, challenging reassessment proceedings initiated by the respondent authorities (Union of India & Ors.). The petitioner argued that these proceedings were arbitrary, high-handed, and unlawful, particularly in light of the Corporate Insolvency Resolution Process (CIRP) initiated against them and the subsequent approval of a resolution plan by the NCLT. The petitioner contended that the reassessment proceedings violated the moratorium imposed under Section 14 of the Insolvency and Bankruptcy Code (IBC) and disregarded the binding nature of the NCLT's order and the approved resolution plan.

## Facts

McNally Bharat Engineering Co. Ltd. (the petitioner) is a company incorporated under the Companies Act, 1956. For the assessment year 2016-17, the petitioner filed its return of income on November 29, 2016, declaring a loss of ₹2,09,79,33,681/-. This return was processed under Section 143(1) of the Act on March 27, 2018, leading to a refund of ₹24,75,45,997/-. Subsequently, Bank of India initiated proceedings under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) before the National Company Law Tribunal (NCLT), Kolkata Bench, for Corporate Insolvency Resolution Process (CIRP) against the petitioner. The NCLT admitted the petition on April 29, 2022, and ratified the appointment of a Resolution Professional. On December 19, 2023, the NCLT approved a resolution

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## Issues and analysis

### Issue 1: Whether the reassessment proceedings initiated by the respondent authorities under Sections …

**Ratio:** The Insolvency and Bankruptcy Code, 2016 (IBC), being a special statute, has an

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**Reasoning:** The court reasoned that the actions of the respondent authorities in initiating and

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**Interpretation:** The court interpreted Section 14 of the IBC and Section 238 of the IBC to mean

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**Application:** In this case, the court applied the ratio and reasoning to the specific facts

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## Parties

- **Judges:** Rajarshi Bh…
- **Respondents:** McNally Bharat…; Union of…
- **Other parties:** Kohi…

## Timeline

- **2016-11-29 — Filing of Income Tax…**: The petitioner filed its return of income for the assessment year 2016-17, declaring a…
- **2018-03-27 — Processing of Income…**: The income tax return was processed under Section 143(1) of the Act, leading to a refund…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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