Section 7 insolvency admission not barred by pending winding-up, SARFAESI, or DRT proceedings when default is established.

A pending winding-up petition, without any order of winding up or liquidation, does not bar admission of a section 7 application under the Insolvency and Bankruptcy Code, and parallel SARFAESI or DRT proceedings also do not prevent initiation because the Code has overriding effect. The record further showed sanctioned and assigned financial facilities, acknowledgments in audited statements, and admitted default, while the proposed interim resolution professional met statutory requirements and no disciplinary proceeding was pending. The application was therefore complete and eligible for admission, leading to admission, appointment of an interim resolution professional, and declaration of moratorium.

---

---

Issues: (i) Whether pendency of winding-up proceedings and parallel SARFAESI and DRT actions barred admission of the application under section 7 of the Insolvency and Bankruptcy Code, 2016. (ii) Whether the financial creditor had established a complete application, default, and eligibility for admission and consequential reliefs under the Code.

Issue (i): Whether pendency of winding-up proceedings and parallel SARFAESI and DRT actions barred admission of the application under section 7 of the Insolvency and Bankruptcy Code, 2016.

Analysis: The pending winding-up petition had not culminated in any order of winding up or liquidation, and no provisional or official liquidator had been appointed. The Code contains an overriding clause, and prior recovery proceedings under SARFAESI or before the DRT do not prevent initiation of corporate insolvency resolution proceedings. On the facts placed before the Tribunal, the earlier proceedings did not operate as a legal bar.

Conclusion: The application was not barred on account of the pending winding-up proceedings or the pendency of SARFAESI and DRT proceedings.

Issue (ii): Whether the financial creditor had established a complete application, default, and eligibility for admission and consequential reliefs under the Code.

Analysis: The record showed sanctioned and assigned financial facilities, acknowledgments in the corporate debtor's audited statements, and admission of outstanding dues. The proposed interim resolution professional satisfied the statutory requirements, the application was complete, and no disciplinary proceeding was pending. The conditions for admission under section 7 were therefore met.

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

Final Conclusion: The corporate insolvency resolution process was set in motion against the corporate debtor, with statutory moratorium and insolvency management consequences following admission of the section 7 application.

Ratio Decidendi: A pending winding-up petition, without any order of winding up or liquidation, and parallel SARFAESI or DRT proceedings do not bar admission of a complete section 7 application where default is established and the statutory requirements for admission are satisfied.

---