# In the matter of Shaikh Mohammed Tariq vs. Aegis Forging Ltd.. I.A. No. 4107, 4165 of 2022 in Company Appeal (AT) (Insolvency) No. 1342 of 2022

> NCLAT judgment dated 2022-11-15. Citation: TCN-2022-NCLAT-00101. This is a Company Appeal (AT) (Ins.) No. 1342 of 2022 filed by Shaikh Mohammed Tariq against…

- **Court:** NCLAT
- **Order date:** 15 Nov 2022
- **Citation:** TCN-2022-NCLAT-00101
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/shaikh-mohammed-tariq-vs-aegis-forging-ltd-ia-no-4107-4165-of-2022-in-company-ap-469ccc7f

## Summary

### Background

This is a Company Appeal (AT) (Ins.) No. 1342 of 2022 filed by Shaikh Mohammed Tariq 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 based on his personal guarantee for the Creditor's investors' funds to the Corporate Debtor. Arbitration proceedings were initiated, resulting in an award dated 11.11.2013 in favor of the Appellant, which is under execution.

## Facts

Shaikh Mohammed Tariq, the Appellant, provided a personal guarantee for funds given by Creditor's investors to a Corporate Debtor, Aegis Forging Ltd. Arbitration proceedings were initiated based on this guarantee, resulting in an award dated 2013-11-11 in favor of the Appellant. This award is currently under execution. The Adjudicating Authority rejected the Appellant's Section 7 application for initiation of CIRP, leading to the present appeal. The Appellant argues that the guarantee constitutes a financial debt under Section 5 (8) (i) of the Code. The existence of the arbitration award and its execution are key facts influencing the decision.

## 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 arbitration award, already under execution by

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**Interpretation:** The interpretation of Section 7 of the IBC, in light of the Supreme Court's

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**Application:** In this case, the existence of an arbitration award under execution, which

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## Parties

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

## Timeline

- **2013-11-11 — Arbitration…**: An arbitration award was…
- **2022-11-15 — Hearing…**: Heard Learned Counsel…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(8) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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