# In the matter of Ace Engineering (India) Pvt. Ltd. IA No. 312-2023 And CP (IB) No. 54-Chd-J&K-2019

> NCLT judgment dated 2023-03-06. Citation: TCN-2023-NCLT-04302. The Jammu & Kashmir Bank Ltd. filed a petition under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 6 Mar 2023
- **Citation:** TCN-2023-NCLT-04302
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/ace-engineering-india-pvt-ltd-ia-no-312-2023-and-cp-ib-no-54-chd-jk-2019-2790295e

## Summary

### Background

The Jammu & Kashmir Bank Ltd. filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against Ace Engineering (India) Pvt. Ltd. The bank claimed that Ace Engineering defaulted on credit facilities availed in 2012, including cash credit and bank guarantee facilities. The corporate debtor was declared a Non-Performing Asset (NPA) on 31.03.2016. The bank issued a recall notice on 10.04.2017. The corporate debtor argued that a full and final settlement had been reached, with more than Rs. 11.30 crore paid. The bank refuted this, stating that the part-payment was adjusted towards credit facilities, but the outstanding amount remained due. The corporate debtor also filed a Writ

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## Facts

Jammu & Kashmir Bank Ltd. filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP against Ace Engineering (India) Pvt. Ltd. Ace Engineering availed credit facilities in 2012, including a cash credit limit of Rs. 9 crores and a bank guarantee facility of Rs. 5 crores. The last payment from Ace Engineering was on 2017-12-29. The account was declared an NPA on 2016-03-31. The total amount claimed to be in default was Rs. 10,11,23,983.19 as of 2018-10-31. Ace Engineering argued that a full and final settlement had been reached, with more than Rs. 11.30 crore paid. They entered into an agreement to sell property to guarantors in consideration of repayment of the loan. The bank issued a letter to guarantors absolving them of

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## Issues and analysis

### Issue 1: Whether the present application is …

**Ratio:** The limitation period for filing an application under Section 7 of the IBC is three years

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**Reasoning:** The court observed that the date of default was 2016-03-31, when the account was

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**Interpretation:** The interpretation of the limitation period is crucial for determining the

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**Application:** The court applied the three-year limitation period to the facts of the case,

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## Parties

- **Judges:** Harnam Singh…; SUBRATA KUM…
- **Appellants:** Jammu & Kashmir…
- **Respondents:** Ace Engineering…

## Timeline

- **2010-12-29 — Incorporation of…**: Ace Engineering (India) Pvt. Ltd. was…
- **2012-01-01 — Credit Facilities…**: Ace Engineering availed various credit loan facilities, including a cash credit limit of…

## 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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