# In the matter of Essar Machine Works Ltd. CP-717-IB-CB-2018

> NCLT judgment dated 2018-10-10. Citation: TCN-2018-NCLT-00605. The Petitioner, A.K.R Finance Limited, filed a Company Petition under Section 7 of the I&B Code…

- **Court:** NCLT
- **Order date:** 10 Oct 2018
- **Citation:** TCN-2018-NCLT-00605
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/essar-machine-works-ltd-cp-717-ib-cb-2018-71337e94

## Summary

### Background

The Petitioner, A.K.R Finance Limited, filed a Company Petition under Section 7 of the I&B Code against the Corporate Debtor, Essar Machine Works Limited, for initiation of Corporate Insolvency Resolution Process (CIRP). The petition was based on the premise that the Corporate Debtor defaulted on repaying a loan of ₹4,00,000 availed in 1997, with the debt aggregating to ₹18,58,198. The case was filed based on letters of confirmation and ledger accounts purportedly maintained by the Corporate Debtor from 01/04/1997 to 20/03/2017.

## Facts

A.K.R Finance Limited (the Petitioner) filed a Company Petition under Section 7 of the I&B Code against Essar Machine Works Limited (the Corporate Debtor) seeking initiation of Corporate Insolvency Resolution Process (CIRP). The petition was based on the Corporate Debtor's alleged default in repaying a loan of ₹4,00,000 availed in 1997, with the outstanding debt amounting to ₹18,58,198. The Petitioner relied on letters of confirmation dated between 2015 and 2017, and ledger accounts purportedly maintained by the Corporate Debtor from 01/04/1997 to 20/03/2017. The court observed that no document was presented to prove that the loan was given in 1997. The letters of confirmation lacked a company seal, and the ledger accounts were not signed by the Corporate Debtor.

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## Issues and analysis

### Issue 1: Whether the Company Petition filed by the Petitioner is maintainable under Section 7 of the I&B …

**Ratio:** A petition under Section 7 of the I&B Code requires sufficient evidence to prove the

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**Reasoning:** The court reasoned that the Petitioner failed to provide sufficient evidence to prove the

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**Interpretation:** Section 7 of the I&B Code requires the petitioner to provide sufficient

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**Application:** The court applied the ratio to the facts of the case and found that the

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## Parties

- **Judges:** B.S.V. Prakash…; S. VIJAYARA…
- **Appellants:** A.K.R FINANCE…
- **Respondents:** ESSAR MACHINE…

## Timeline

- **1997-01-01 — Loan Ava…**: Corporate Debtor, Essar Machine Works Limited, availed a loan of ₹4,00,000 from A.K.R…
- **2015-03-05 — Letter of Conf…**: First letter of confirmation…

## 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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