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

> NCLT judgment dated 2018-10-10. Citation: TCN-2018-NCLT-00609. 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-00609
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/essar-machine-works-ltd-cp-717-ib-cb-2018-b7459633

## 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 the Corporate Insolvency Resolution Process. The petition was based on the premise that the Corporate Debtor defaulted on a loan of ₹4,00,000 availed in 1997, with the debt aggregating to ₹18,58,198.

## 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 the Corporate Insolvency Resolution Process (CIRP). The petition was filed based on the Corporate Debtor's alleged default on a loan of ₹4,00,000 availed in 1997, which had grown to ₹18,58,198. The Petitioner submitted letters of confirmation from 2015-2017 and ledger accounts from 1997-2017 as evidence. However, the court found no evidence that the loan was actually given in 1997, no acknowledgement of the debt within three years of the loan, and the letters of confirmation lacked a company seal. The Corporate Debtor did not appear before the court, and proper notice was not served. The

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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 Company Petition under Section 7 of the I&B Code requires sufficient evidence to

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

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

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**Application:** In this case, the Petitioner failed to meet the burden of proof as the evidence

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## Parties

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

## Timeline

- **1997-01-01 — Loan Ava…**: Essar Machine Works Limited allegedly availed a loan of ₹4,00,000 from A.K.R Finance…
- **2015-03-05 — Confirmation…**: 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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