# In the matter of IL&FS Financial Services Limited vs. Adhunik Meghalaya Steels Private Limited

> NCLAT judgment dated 2025-03-25. Citation: TCN-2025-NCLAT-00145. This case involves an appeal against an order dated 16.05.2024 passed by the Adjudicating…

- **Court:** NCLAT
- **Order date:** 25 Mar 2025
- **Citation:** TCN-2025-NCLAT-00145
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/ilfs-financial-services-limited-vs-adhunik-meghalaya-steels-private-limited-021a85f6

## Summary

### Background

This case involves an appeal against an order dated 16.05.2024 passed by the Adjudicating Authority, National Company Law Tribunal, Guwahati Bench, which dismissed a Section 7 application filed by IL&FS Financial Services Limited (Financial Creditor) against Adhunik Meghalaya Steels Private Limited (Corporate Debtor) on the grounds of being time-barred. The loan agreement was executed on 27.02.2015, and the account was declared NPA on 01.03.2018. The Financial Creditor filed a Section 7 application on 15.01.2024.

## Facts

On 27.02.2015, IL&FS Financial Services Ltd. (Financial Creditor) and Adhunik Meghalaya Steels Pvt. Ltd. (Corporate Debtor) entered into a Loan Agreement for Rs 30 Cr, of which Rs 24.44 Cr was disbursed on 17.03.2015. The loan was secured by the pledge of 8,10,804 shares of Adhunik Metals Ltd. The Corporate Debtor failed to repay the debt, leading the Financial Creditor to declare the account as NPA on 01.03.2018. A notice of default was issued on 10.07.2018, followed by a Recall Notice on 10.08.2018. The Financial Creditor filed a Section 7 application on 15.01.2024, claiming Rs 55.45 Cr. The Adjudicating Authority rejected the application as time-barred. The Corporate Debtor's balance sheet for FY 2019-20, signed on 12.08.2020 and uploaded on MCA on 14.02.2021,

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## Issues and analysis

### Issue 1: Whether the Section 7 application filed by the …

**Ratio:** The limitation period for filing a Section 7 application is three years from the date of

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**Reasoning:** The court reasoned that even if the balance sheet constituted an acknowledgment of debt,

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**Interpretation:** The court interpreted Section 18 of the Limitation Act to mean that a fresh

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**Application:** The court applied the ratio to the facts by determining that even with the

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## Parties

- **Judges:** Ashok Bh…; Barun M…
- **Appellants:** IL & FS Financial…
- **Respondents:** Adhunik Meghalaya…
- **Advocates:** Krishnendu…; Niharika…; +8 more

## Timeline

- **2015-02-27 — Loan Agreement…**: IL&FS Financial Services Ltd. and Adhunik Meghalaya Steels Pvt. Ltd. entered into a Loan…
- **2015-03-17 — Loan Disb…**: Rs 24.44 Cr was disbursed to…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 61 — Appeals and Appellate Authority](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-61)

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