Section 10 insolvency application maintainable despite SARFAESI proceedings; CIRP admission follows statutory compliance and proven default.

A corporate debtor's Section 10 application under the Insolvency and Bankruptcy Code, 2016 was held complete and maintainable because it was filed by an authorised director with the board resolution, financial statements, the proposed interim resolution professional's written communication, and the required particulars of default under the Code and the 2016 Rules. The objection that the debtor had sufficient means was unsupported by evidence, so no defect was established. Pendency of SARFAESI proceedings did not bar admission of the insolvency application, as Section 238 of the Code gives overriding effect to inconsistent remedies. The corporate debtor was admitted to corporate insolvency resolution process, moratorium was imposed, and an interim resolution professional was appointed.

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Issues: (i) Whether the corporate debtor's application under Section 10 of the Insolvency and Bankruptcy Code, 2016 was complete and maintainable for initiation of corporate insolvency resolution process; (ii) Whether pendency of proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 barred admission of the application.

Issue (i): Whether the corporate debtor's application under Section 10 of the Insolvency and Bankruptcy Code, 2016 was complete and maintainable for initiation of corporate insolvency resolution process.

Analysis: The application was filed by the authorised director of the corporate debtor, supported by the board resolution, audited financial statements, provisional financial statement, and the proposed interim resolution professional's written communication. The record disclosed default and contained the particulars required under Section 10 and Rule 7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The objection that the debtor had sufficient means was unsupported by documentary material, and no defect in the application was established.

Conclusion: The application was complete and maintainable, and the corporate insolvency resolution process was rightly admitted.

Issue (ii): Whether pendency of proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 barred admission of the application.

Analysis: The pending SARFAESI proceedings did not operate as a bar to insolvency proceedings. The overriding effect of Section 238 of the Insolvency and Bankruptcy Code, 2016 prevails over inconsistent remedies, and the pendency of recovery action under SARFAESI could not defeat initiation of insolvency resolution once default and statutory compliance were shown.

Conclusion: Pendency of SARFAESI proceedings did not preclude admission of the application under the Code.

Final Conclusion: The corporate debtor was admitted into corporate insolvency resolution process, moratorium was imposed, and an interim resolution professional was appointed.

Ratio Decidendi: A complete application by the corporate debtor under Section 10 of the Insolvency and Bankruptcy Code, 2016, disclosing default and complying with the prescribed requirements, must be admitted, and pending SARFAESI does not bar insolvency proceedings because of the Code's overriding effect.

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