TaxTMI Login
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →Just a moment...
AI OCR ✕Convert scanned orders, printed notices, PDFs and images into clean, searchable, editable text within seconds. Starting at 2 Credits/page
Try Now →
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether a financial creditor may pursue proceedings simultaneously under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and under section 7 of the Insolvency and Bankruptcy Code, 2016. (ii) Whether the filing of such parallel proceedings amounts to forum shopping or to fraudulent or malicious initiation so as to attract section 65 of the Insolvency and Bankruptcy Code, 2016.
Issue (i): Whether a financial creditor may pursue proceedings simultaneously under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and under section 7 of the Insolvency and Bankruptcy Code, 2016.
Analysis: The insolvency framework permits a financial creditor to invoke section 7 notwithstanding pendency of measures under the SARFAESI Act. The Code contains a non-obstante clause giving it overriding effect over inconsistent laws, and the existence of recovery or enforcement proceedings under another statute does not bar commencement or continuation of insolvency proceedings where debt and default are otherwise made out.
Conclusion: Simultaneous proceedings were held to be permissible and the contrary view taken by the Adjudicating Authority was rejected.
Issue (ii): Whether the filing of such parallel proceedings amounts to forum shopping or to fraudulent or malicious initiation so as to attract section 65 of the Insolvency and Bankruptcy Code, 2016.
Analysis: Mere disclosure that SARFAESI proceedings had already been initiated did not amount to suppression of material facts. The concurrent invocation of remedies under two statutes, by itself, was insufficient to infer fraudulent or malicious intent, and therefore could not justify a proceeding under section 65.
Conclusion: The allegation of forum shopping and fraudulent or malicious initiation was not sustained.
Final Conclusion: The impugned order was set aside and the appeal succeeded, with the insolvency application left to be decided expeditiously in accordance with law.
Ratio Decidendi: Pendency of SARFAESI measures does not preclude a section 7 insolvency application, and simultaneous invocation of statutory remedies does not by itself establish forum shopping or malicious initiation under section 65.
TaxTMI 
TaxTMI 
