# In the matter of Promac Engineering Industries Ltd.

> NCLT judgment dated 2024-01-31. Citation: TCN-2024-NCLT-02836. The operational creditor filed a petition under section 9 of the IBC, 2016, seeking to initiate…

- **Court:** NCLT
- **Order date:** 31 Jan 2024
- **Citation:** TCN-2024-NCLT-02836
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/promac-engineering-industries-ltd-fb9075f3

## Summary

### Background

The operational creditor filed a petition under section 9 of the IBC, 2016, seeking to initiate Corporate Insolvency Resolution Process against the corporate debtor for an outstanding operational debt. The corporate debtor contested the application, primarily on the grounds of limitation and pre-existing dispute.

## Facts

M/s Vasavi Power Services Pvt. Ltd. (Operational Creditor) filed a petition under section 9 of the Insolvency and Bankruptcy Code, 2016, against M/s Promac Engineering Industries Ltd. (Corporate Debtor) to initiate Corporate Insolvency Resolution Process. The Operational Creditor claimed a total outstanding amount of Rs. 2,43,48,930/-, with the date of default stated as September 7, 2019, in Part IV of Form 5. The Corporate Debtor had awarded a Work Order on September 3, 2016, for 'Electrical, Instrumentation and Automation' (EIA) system erection and commissioning assistance in Sendou, Senegal, for an estimated value of Rs. 5,44,31,372/- over 12 months. This work order was later amended on October 12, 2017, for additional EIA systems, and another work order for ESP

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## Issues and analysis

### Issue 1: Whether the present petition is filed within the prescribed limitation period of 3 years from the …

**Ratio:** The petition was filed on April 17, 2023, which falls outside the allowed period of

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**Reasoning:** The date of default was September 7, 2019. The three-year limitation period would

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**Interpretation:** The Supreme Court's order in Suo Moto Writ Petition No. 03/2020 provides for an

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**Application:** Applying the Supreme Court's interpretation, the actual limitation for the

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## Parties

- **Judges:** K. Bi…; Manoj Kumar…
- **Appellants:** M/S VASAVI POWER…; M/S Vasavi Power…
- **Respondents:** M/S PROMAC…
- **Advocates:** For the Petitioner…; Sr Counsel with…; +3 more

## Timeline

- **September 3, 2016 — Work Order…**: Corporate Debtor awarded a Work Order for 'Electrical, Instrumentation and Automation'…
- **October 12, 2017 — Work Order…**: Corporate Debtor amended the work order by…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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