# In the matter of Golden Tobacco Limited C.P. No. (IB) 268-7-NCLT-AHM-2020

> NCLT judgment dated 2021-01-25. Citation: TCN-2021-NCLT-03238. Arrow Engineering Ltd. filed a petition under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 25 Jan 2021
- **Citation:** TCN-2021-NCLT-03238
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/golden-tobacco-limited-cp-no-ib-268-7-nclt-ahm-2020-704bd7b9

## Summary

### Background

Arrow Engineering Ltd. filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Golden Tobacco Limited, seeking reliefs under Section 7(5)(a) and Section 13(1)(a)(b)(c) of the Code. The petition was based on an alleged Memorandum of Understanding (MoU) and a Letter of Intent (LoI) between the parties, concerning financial assistance and marketing services for the development of a property owned by Golden Tobacco Limited. Golden Tobacco Limited raised objections, contending that the petitioner suppressed material facts, had a counter claim, and that the claim was barred by limitation. The corporate debtor also argued that the MoU was incomplete and lacked essential information, and that the petitioner was not a financial creditor.

## Facts

Arrow Engineering Ltd. (the applicant) filed a petition against Golden Tobacco Limited (the respondent) under Section 7 of the Insolvency and Bankruptcy Code, 2016. The applicant claimed to have provided financial assistance and marketing services to the respondent based on a Memorandum of Understanding (MoU) and a Letter of Intent (LoI). The MoU, however, lacked essential details such as the date of execution and addresses of the parties. The applicant disbursed Rs. 10.00 crores to the respondent between 03.06.2011 and 16.07.2011, as reflected in a letter dated 22.07.2011. The respondent was to develop a property at S.V. Road, Vile Parle (West), Mumbai. The respondent raised objections, stating that the applicant suppressed material facts, had a counter claim for Rs.

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## Issues and analysis

### Issue 1: Whether the petition filed by Arrow Engineering Ltd. is maintainable under Section 7 of the …

**Ratio:** A petition under Section 7 of the IB Code requires the existence of a financial debt and

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**Reasoning:** The Adjudicating Authority found that the MoU lacked essential information, the

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**Interpretation:** Section 7 of the IB Code outlines the procedure for initiating the corporate

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**Application:** In this case, the Adjudicating Authority found that the essential requirements

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## Parties

- **Judges:** Manorama…; Chockalingam…
- **Appellants:** Arrow Engineering…
- **Respondents:** Golden Tobaccco…; Golden Tobbacco…

## Timeline

- **2020-06-26 — Petition…**: Arrow Engineering Limited filed a petition under section 7 of The Insolvency and…
- **2011-06-03 — Letter of…**: Letter of Intent dated 03.06.2011 issued by Golden Tobacco Limited to Arrow Engineering…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(7) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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