Insolvency admission is not blocked by pending SARFAESI or DRT proceedings, and guarantor asset recovery may continue.

Pendency of SARFAESI or DRT proceedings did not bar admission of a complete section 10 insolvency application where debt, default and statutory eligibility were shown; the tribunal admitted the CIRP and declared moratorium. The corporate debtor's request to restrain financial creditors from proceeding against guarantors' secured assets was also rejected because those proceedings concerned third-party security, not the debtor's own assets, and there was no basis to prevent action in accordance with law.

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Issues: (i) Whether pendency of SARFAESI and DRT proceedings barred admission of the corporate debtor's application under section 10 of the Insolvency and Bankruptcy Code, 2016. (ii) Whether, after admission of the section 10 application, the corporate debtor could restrain financial creditors from proceeding against the guarantors' secured assets.

Issue (i): Whether pendency of SARFAESI and DRT proceedings barred admission of the corporate debtor's application under section 10 of the Insolvency and Bankruptcy Code, 2016.

Analysis: Admission under section 10 required existence of debt, default, and absence of disqualification under section 11. The record showed admitted borrowings, default, and classification of the accounts as non-performing assets. The fact that recovery steps had been initiated under SARFAESI or that proceedings were pending before the DRT did not prevent initiation of CIRP. Once the application was complete and the statutory conditions were satisfied, the Adjudicating Authority was bound to admit it.

Conclusion: The application under section 10 was maintainable and was admitted.

Issue (ii): Whether, after admission of the section 10 application, the corporate debtor could restrain financial creditors from proceeding against the guarantors' secured assets.

Analysis: The relief sought was directed against recovery from properties offered by guarantors. The proceedings were being pursued against third-party security and not against the corporate debtor's own assets. In view of the admission of CIRP and the appointment of the interim resolution professional, the corporate debtor had no basis to stop the financial creditors from proceeding in accordance with law against the guarantors' properties.

Conclusion: The requested restraint against the financial creditors was declined and the application was dismissed as not maintainable.

Final Conclusion: CIRP was admitted against the corporate debtor, moratorium was declared, and the ancillary request to restrain recovery against guarantor-backed securities was refused.

Ratio Decidendi: Pendency of SARFAESI or DRT proceedings does not bar admission of a complete section 10 application where debt and default are established, and the corporate debtor cannot prevent creditors from proceeding against guarantors' secured assets in the circumstances of the case.

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