# In the matter of M/S Trading Engineers (International) Limited

> NCLT judgment dated 2024-10-14. Citation: TCN-2024-NCLT-00439. The case involves IA-875/2021, preferred by the erstwhile Resolution Professional (RP), Mr.…

- **Court:** NCLT
- **Order date:** 14 Oct 2024
- **Citation:** TCN-2024-NCLT-00439
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/ms-trading-engineers-international-limited-879a185a

## Summary

### Background

The case involves IA-875/2021, preferred by the erstwhile Resolution Professional (RP), Mr. Vivek Raheja, for approval of a Resolution Plan, and IA-2205/2021, preferred by Mr. Anil Kumar Tyagi for rejection of the plan. The National Company Law Tribunal (NCLT) has been hearing arguments from the counsels of the involved parties. The core issues revolve around the eligibility of the Corporate Debtor (CD) for MSME exemptions under Section 29A of the Insolvency and Bankruptcy Code (IBC), the eligibility of the Successful Resolution Applicant (SRA), and the conduct of the RP, including potential concealment of ineligibility and suppression of material facts from the Committee of Creditors (CoC).

## Facts

In 1972, M/s Trading Engineers International Ltd. (Corporate Debtor) was established under the Companies Act, 1956. The Corporate Debtor was an OEA of Kirloskar Oil Engines Ltd and was/is in the business of Manufacturing, supplying DG Sets and other equipment for the Ministry of Defense (MOD) and other government departments. In 2008, the Corporate Debtor expanded its business in TSP / EPC, Transmission. The Corporate Debtor was under the management and control of directors including Bala Chhabra, Sushant Chhabra, Mrs. Nargis Malik, and Sanjeev Kapoor. Key shareholders included VK Chhabra, Bala Chhabra, Sushant Chhabra, Ruchi Chhabra, Unitech Machines Ltd., SAB Holdings (India) Pvt. Ltd., Gessup Logistics and Finance Pvt. Ltd., and Techno Auto Components (India) Pvt.

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor is entitled to be exempted from the application of clause (c) & …

**Ratio:** Section 29A of the IBC outlines the criteria for ineligibility to be a resolution

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**Reasoning:** The IBBI noted that despite the CD not being an MSME at the time of commencement of CIRP,

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**Interpretation:** The interpretation of Section 29A and its interaction with Section 240A(1) of

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**Application:** The NCLT must determine whether the Corporate Debtor was eligible to be

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## Parties

- **Judges:** Sh. Ashok Kumar…; SUBRATA KUM…
- **Appellants:** Vijaya Pu…
- **Respondents:** M/s. Trading…

## Timeline

- **1972-01-01 — Establishment of…**: M/s Trading Engineers International Ltd. was…
- **2008-01-01 — Business Ex…**: The Corporate Debtor expanded its…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 66 — Fraudulent trading or wrongful trading](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-66)

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