# In the matter of Naresh Kumar Aggarwal vs. CFM Asset Reconstruction Pvt. Ltd. & Ors. Company Appeal (AT) (Insolvency) No.470 of 2023

> NCLAT judgment dated 2023-05-16. Citation: TCN-2023-NCLAT-00527. The appeal challenges an order dated February 28, 2023, passed by the Adjudicating Authority…

- **Court:** NCLAT
- **Order date:** 16 May 2023
- **Citation:** TCN-2023-NCLAT-00527
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/naresh-kumar-aggarwal-vs-cfm-asset-reconstruction-pvt-ltd-ors-company-appeal-c2a0f20e

## Summary

### Background

The appeal challenges an order dated February 28, 2023, passed by the Adjudicating Authority (NCLT), New Delhi, which admitted a Section 7 application filed by CFM Asset Reconstruction Pvt. Ltd. against Nikhil Footwears Pvt. Ltd. The appellant, a shareholder of the corporate debtor, argues that the assignment agreement was unregistered and that simultaneous CIRP applications for the same debt are not permissible.

## Facts

State Bank of India sanctioned various credit facilities to Action Ispat and Power Private Limited, the principal borrower. In 2013, a Master Restructuring Agreement was executed between the State Bank of India and other banks with the principal borrower. The corporate debtor, M/s Nikhil Footwear Pvt. Ltd., executed a Deed of Guarantee on September 30, 2013, in favor of SBICAP Trustee Company Ltd. Another Master Restructuring Agreement was executed on June 29, 2016. State Bank of India filed Company Petition CP (IB) No. 1096 of 2018 against the principal borrower, which was admitted on March 23, 2022. Subsequently, on January 18, 2021, the State Bank of India entered into an agreement with Respondent No. 1, CFM Asset Reconstruction Pvt. Ltd., assigning the debt owed by

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## Issues and analysis

### Issue 1: Whether an unregistered Assignment Agreement is valid for initiating proceedings under Section 7 of …

**Ratio:** An Assignment Agreement executed by a bank or financial institution in favor of an Asset

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**Reasoning:** The NCLAT held that the Assignment Agreement, being in accordance with Section 5 of the

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**Interpretation:** The court interpreted Section 5 of the SARFAESI Act, 2002, as an enabling

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**Application:** The Assignment Agreement dated January 18, 2021, between State Bank of India

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## Parties

- **Judges:** Ashok Bh…; Barun M…
- **Appellants:** Naresh Kumar…
- **Respondents:** Nikhil Footwears…; CFM Asset…; +1 more
- **Advocates:** Alok…; Varsha Ba…; +4 more

## Timeline

- **September 30, 2013 — Deed of Gua…**: M/s Nikhil Footwear Pvt. Ltd. (Corporate Debtor) executed a Deed of Guarantee in favour…
- **June 29, 2016 — Master Restructuring…**: Another Master Restructuring…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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