# In the matter of McNally Bharat Engg. Co. Ltd. CA  (IB) No. 1220-KB-2019 in CP (IB) No. 1506-KB-2018

> NCLT judgment dated 2019-10-16. Citation: TCN-2019-NCLT-00959. The case involves an application for the initiation of the Corporate Insolvency Resolution…

- **Court:** NCLT
- **Order date:** 16 Oct 2019
- **Citation:** TCN-2019-NCLT-00959
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/mcnally-bharat-engg-co-ltd-ca-ib-no-1220-kb-2019-in-cp-ib-no-1506-kb-2018-9e6a18eb

## Summary

### Background

The case involves an application for the initiation of the Corporate Insolvency Resolution Process (CIRP) under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, filed by Trinetra Electronics Limited (Financial Creditor) against McNally Bharat Engineering Co. Limited (Corporate Debtor). The financial creditor claimed a default of Rs. 3,35,62,739.73, including a principal sum of Rs. 2,00,00,000 and interest of Rs. 1,35,62,739.73 as of September 30, 2014. The corporate debtor argued that the debt was time-barred under the Limitation Act, 1963, and that acknowledgments of debt were not in compliance with Section 18 of the Act.

## Facts

Trinetra Electronics Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against McNally Bharat Engineering Co. Limited (Corporate Debtor). The claim was based on a default of Rs. 3,35,62,739.73, including a principal of Rs. 2,00,00,000 and interest of Rs. 1,35,62,739.73 as of September 30, 2014. The Financial Creditor and Corporate Debtor entered into an agreement on August 6, 2014, where the Financial Creditor agreed to grant Rs. 2 crore as Inter-Corporate Deposit (ICD) carrying 16% interest, payable on September 30, 2014. The Corporate Debtor provided Post-Dated Cheques (PDC) and a Demand Promissory Note. The Corporate Debtor's counsel argued

…

## Issues and analysis

### Issue 1: Whether the debt is …

**Ratio:** Section 18 of the Limitation Act, 1963, states that acknowledgment of liability in

…

**Reasoning:** The court reasoned that the letters from the corporate debtor confirming the outstanding

…

**Interpretation:** The court interpreted Section 18 of the Limitation Act, 1963, to mean that any

…

**Application:** The court applied the ratio to the facts by finding that the letters from the

…

## Parties

- **Judges:** Madan B.…; Virendra Kumar…
- **Appellants:** Trinetra Electroni…
- **Respondents:** McNally Bharat…

## Timeline

- **2014-08-06 — Agreement…**: Financial creditor and corporate debtor entered into an agreement whereby financial…
- **2014-09-30 — Payment Du…**: ICD was payable on this date. Corporate debtor…

## 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)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-chandigarh/mcnally-bharat-engg-co-ltd-ca-ib-no-1220-kb-2019-in-cp-ib-no-1506-kb-2018-9e6a18eb