Shaikh Mohammad Tariq vs Aegis Forging Limited

IN THE MATTER OF: Shaikh Mohammed Tariq ....Appellant

Vs.

Aegis Forging Ltd. ....Respondent

Present: For Appellant: Mr. Abhinav Raghuvanshi, Mr. Ashutosh Shukla, Advocates For Respondent:

ORDER

15.11.2022: Heard Learned Counsel for the Appellant.

This appeal has been filed against the order passed by the Adjudicating

Authority rejecting Section 7 petition filed by the Appellant for initiation of

CIRP.

The appellant's case is that on his personal guarantee the Creditor's

investors gave some funds to the Corporate Debtor. The Appellant's further

case is that on the basis of the said guarantee, arbitration proceedings were

initiated and there is an award dated 11.11.2013 in favour of the Appellant

which award has already been put into execution by the Appellant.

Adjudicating Authority after noticing the aforesaid fact has refused to

admit Section 7 application.

2

Learned Counsel for the Appellant submits that the guarantee which was

given by the Appellant is fully covered by Section 5 (8) (i) of the Code which was

a financial debt.

Be that as it may, the fact that there is already an award to pay Cash

Security of Rs. 3,64,58,785/- with interest, which award has already been put

in execution by the Financial Creditor, this was reason good enough to refuse

admission of Section 7 application. It has now been laid down by the Hon'ble

Supreme Court in Vidarbha Industries Power Ltd. vs Axis Bank Limited that

admission of Section 7 application is not obligatory merely on proof of debt and

default.

The facts as has been noticed by the Adjudicating Authority, as noted

above are sufficient to refuse admission of Section 7 application. We thus are of

the view that the appeal deserves to be dismissed.

Appeal is dismissed accordingly.

[Justice Ashok Bhushan] Chairperson

[Dr. Alok Srivastava] Member (Technical)

[Mr. Barun Mitra] Member (Technical) sa/nn

Company Appeal (AT) (Ins.) No. 1342 of 2022