Parallel recovery proceedings do not bar insolvency admission where a complete section 10 application satisfies Code requirements.

Pendency of SARFAESI and Debt Recovery Tribunal proceedings did not bar admission of a corporate debtor's section 10 application under the Insolvency and Bankruptcy Code, because the Code operates with overriding effect and parallel recovery actions cannot defeat insolvency initiation. The application was found complete and bona fide, with disclosure of defaults, creditors, required documents, and a proposed interim resolution professional; accordingly, the statutory conditions for admission were satisfied. The application was admitted, corporate insolvency resolution process commenced, an interim resolution professional was appointed, and moratorium followed.

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Issues: (i) whether pendency of proceedings under other laws, including SARFAESI and Debt Recovery Tribunal proceedings, barred admission of the corporate applicant's section 10 application under the Insolvency and Bankruptcy Code, 2016; (ii) whether the application was complete, bona fide, and fit for admission with commencement of corporate insolvency resolution process and moratorium.

Issue (i): whether pendency of proceedings under other laws, including SARFAESI and Debt Recovery Tribunal proceedings, barred admission of the corporate applicant's section 10 application under the Insolvency and Bankruptcy Code, 2016.

Analysis: The corporate applicant was a corporate person entitled to invoke section 10 of the Code. The existence of pending proceedings before other forums, including measures under the SARFAESI regime, was held not to be a bar to initiation of corporate insolvency resolution process. The Code was treated as having overriding effect under section 238, and the pendency of parallel proceedings could not defeat or postpone action under the Code.

Conclusion: The objection based on pendency of SARFAESI and other proceedings was rejected.

Issue (ii): whether the application was complete, bona fide, and fit for admission with commencement of corporate insolvency resolution process and moratorium.

Analysis: The application disclosed the pending proceedings and the financial position of the company, including creditors and defaults. The applicant had filed the required documents, proposed an interim resolution professional, and established the existence of financial debt and default. The application was found to be bona fide and not filed merely to delay recovery. On that basis, the statutory requirements for admission were satisfied, and the consequences under sections 13 and 14 followed, including appointment of the interim resolution professional and imposition of moratorium.

Conclusion: The application was admitted, corporate insolvency resolution process commenced, an interim resolution professional was appointed, and moratorium was declared.

Final Conclusion: The corporate debtor was permitted to trigger insolvency resolution notwithstanding pending recovery proceedings, and the matter proceeded into the statutory insolvency regime with moratorium and appointment of the interim resolution professional.

Ratio Decidendi: Pendency of proceedings under other statutes does not bar admission of a complete and bona fide section 10 insolvency application, because the Insolvency and Bankruptcy Code operates with overriding effect and the statutory consequences of admission must follow once the threshold requirements are met.

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