# In the matter of McNally Bharat Engineering . Co. Ltd  C.P. (IB) No. 891-KB-2020

> NCLT judgment dated 2022-04-29. Citation: TCN-2022-NCLT-02951. Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 29 Apr 2022
- **Citation:** TCN-2022-NCLT-02951
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/mcnally-bharat-engineering-co-ltd-cp-ib-no-891-kb-2020-b643f555

## Summary

### Background

Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against McNally Bharat Engineering Company Limited, alleging default in payment of financial debt. The Financial Creditor sought initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor based on the default.

## Facts

Bank of India, the Financial Creditor, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against McNally Bharat Engineering Company Limited, the Corporate Debtor, alleging default in payment of Rs.4,78,73,25,854.29/- as of March 10, 2020. The date of default was stated to be January 30, 2019. The Financial Creditor had sanctioned a cash credit facility to the Corporate Debtor, which was renewed from time to time, with the last renewal on March 27, 2018. The Corporate Debtor disputed the submissions by the Financial Creditor, claiming inaccuracies in the debt computation and inconsistencies in the petition. The Corporate Debtor also argued that the alleged debt had not arisen out of the sanction letter dated March 27, 2018, and that the

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 7 of the Insolvency and …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency

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**Reasoning:** The court examined the documents submitted by the Financial Creditor and found them to be

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**Interpretation:** The interpretation of Section 7 requires the Adjudicating Authority to be

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**Application:** In this case, the court found that the Financial Creditor's application was

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## Parties

- **Judges:** Rajasekha…; Balraj…
- **Appellants:** Bank of…
- **Respondents:** McNally Bharat…

## Timeline

- **2018-03-27 — Cash Credit Facility…**: The cash credit facility was…
- **2019-01-30 — Date of D…**: The date of default is…

## 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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