# In the matter of MOHAN RAIL COMPONENTS PRIVATE LIMITED

> NCLT judgment dated 2026-02-20. Citation: TCN-2026-NCLT-00161. Canara Bank, as a Financial Creditor, filed an application under Section 7 of the Insolvency…

- **Court:** NCLT
- **Order date:** 20 Feb 2026
- **Citation:** TCN-2026-NCLT-00161
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/mohan-rail-components-private-limited-33c8b4ce

## Summary

### Background

Canara Bank, as a Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Mohan Rail Components Private Limited, the Corporate Debtor, due to a default of Rs. 63,85,20,356.54/-. The date of default was 31.03.2015.

## Facts

Canara Bank filed an application under Section 7 of the IBC against Mohan Rail Components Private Limited.

The claimed default amount is Rs. 63,85,20,356.54/- with the date of default being 31.03.2015.

The Corporate Debtor challenged the application's maintainability on procedural and legal grounds, including limitation.

The Corporate Debtor issued multiple written communications acknowledging the debt after the initial default date.

An One Time Settlement (OTS) proposal was accepted on 20.03.2021, but the Corporate Debtor failed to adhere to its terms.

The Financial Creditor initiated recovery proceedings under the SARFAESI Act before filing the Section 7 application.

…

## Issues and analysis

### Issue 1: Whether the Section 7 …

**Ratio:** The application is not

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**Reasoning:** The Corporate Debtor issued multiple written communications acknowledging the debt after

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**Interpretation:** Section 18 of the Limitation Act allows for the extension of the limitation

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**Application:** The Adjudicating Authority considered the acknowledgments made by the Corporate

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## Parties

- **Judges:** KHETRABASI…; KAUSHALENDRA…
- **Appellants:** Canara…
- **Respondents:** Mohan Rail…
- **Other parties:** Mohit C…
- **Advocates:** Harsh…; Pulkit…; +3 more

## Timeline

- **31.03.2015 — Date of D…**: The loan account of the Corporate Debtor was…
- **24.03.2015 — Restructuring of…**: The Applicant sanctioned various credit facilities, including cash credit and term loan…

## 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)

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