Shiv Shankar Chowdhury vs Srei Equipment Finance Limited

IN THE MATTER OF: Shiv Shankar Chowdhury, Suspended Director of Victor Buildwel Pvt. Ltd ...Appellant Versus SREI Equipment Finance Ltd. & Anr. ...Respondents Present: For Appellant : Mr. Abhimanyu Bhandari, Sr. Advocate. For Respondents : Mr. Anirban Bhattacharya, Mr. Rajeev Chowdhary, Ms. Priyanka Bhatt, Advocates for R- 1. Ms. Vidhi Jain, Dr. Farrukh Khan, Ms. Ishita Agarwal, Advocates for R-2 (RP).

ORDER

(Hybrid Mode)

11.09.2025: Heard learned counsel for the Appellant as well as learned

counsel for the Respondent. Learned counsel for the Resolution Professional

also appears. This appeal has been filed against order dated 07.04.2025 by

which order the Adjudicating Authority has admitted Section 7 application

filed by the SREI Equipment Finance Ltd.

2. Learned counsel for the Appellant submits that there was issue with

regard to land allotted by the Greater Noida Industrial Development Authority

and the Writ Petition is pending in the Allahabad High Court, hence, the issue

pertaining to the land has not yet been resolved and the Financial Creditor on

account of covenant default of not perfecting the security has initiated

proceeding under Section 7. It is submitted that present is not a default on

which Section 7 application could have been admitted.

3. Learned counsel for the Respondent submitted that financial facilities

upto 140 Crore were extended and when security was not perfected of the

Cont'd.../ mortgaged property, default has been committed and the Adjudicating

Authority has rightly admitted the Section 7 application.

4. The Adjudicating Authority in the impugned order has noticed that

default was committed by the Corporate Debtor in perfecting security of the

mortgaged assets. In para 11 of the order following has been observed by the

Adjudicating Authority.

"11. In the wake, this Adjudicating Authority is satisfied that owing to the non-fulfilment of the conditions stipulated in the aforementioned undertaking, an event of default occurred following which the Applicant/ FC sent notice of default dated 30.08.2023 and finally, the notice of recalling of loan on 21.11.2023. Thus, there was a default in repayment of the defaulted debt."

5. It is not disputed that default in perfecting security of mortgaged assets

is also event of default and when the very land which was basis for obtaining

the financial facilities is not available for perfecting security finding of the

Adjudicating Authority that event of default of default has been committed by

the Corporate Debtor and initiation of CIRP cannot be faulted. We, thus, do

not find any error in the order warranting interference in this appeal. Appeal

is dismissed.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical) Archana/nn

I.A. No. 3175 of 2025 in Comp. App. (AT) (Ins.) No. 507 of 2023 2 of 2