# In the matter of Shaikh Mohammad Tariq Vs. Aegis Forging Ltd.,Company Appeal(AT)(Ins) No.1342 of 2022

> NCLAT judgment dated 2022-11-15. Citation: TCN-2022-NCLAT-00095. The appeal was filed against the order passed by the Adjudicating Authority rejecting Section…

- **Court:** NCLAT
- **Order date:** 15 Nov 2022
- **Citation:** TCN-2022-NCLAT-00095
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/shaikh-mohammad-tariq-vs-aegis-forging-ltdcompany-appeal-97985aaa

## Summary

### Background

The appeal was 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. Arbitration proceedings were initiated based on the guarantee, and an award dated 2013-11-11 was issued in favor of the Appellant, which is already under execution. The Adjudicating Authority refused to admit the Section 7 application.

## Facts

Shaikh Mohammed Tariq, the Appellant, filed an appeal against the Adjudicating Authority's decision to reject a Section 7 application for initiating CIRP against Aegis Forging Ltd., the Corporate Debtor. The Appellant's claim is based on a personal guarantee provided to Creditor's investors who gave funds to the Corporate Debtor. Arbitration proceedings were initiated based on this guarantee, resulting in an award dated 2013-11-11 in favor of the Appellant, which is currently under execution. The Adjudicating Authority refused to admit the Section 7 application, leading to the current appeal. The Appellant contends that the guarantee falls under Section 5(8)(i) of the Code, classifying it as a financial debt. The existence of an arbitral award already under execution

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority was justified in rejecting the Section 7 application for …

**Ratio:** The admission of a Section 7 application is not obligatory merely on proof of debt and

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**Reasoning:** The court reasoned that the existence of an arbitral award already under execution by the

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**Interpretation:** This issue concerns the discretionary power of the Adjudicating Authority in

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**Application:** In this specific case, the existence of the arbitral award under execution was

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## Parties

- **Judges:** Ashok Bh…; Alok Sriv…; +1 more
- **Appellants:** Shaikh Mohammed…
- **Respondents:** Aegis Forgi…

## Timeline

- **2013-11-11 — Arbitral…**: An arbitral award was issued…
- **2022-11-15 — Hearing…**: Learned Counsel for the…

## 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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