Whether subsequent to initiation of proceedings under the SARFAESI Act, a financial creditor can be precluded from filing an application under Section 7 of the Code – State Bank of India Vs. ITMA Hotels India Pvt. Ltd. – NCLT Kochi Bench
The Adjudicating Authority found out that Section 7 of the Code propounds the manner in which CIRP is to be initiated by the “financial creditor” against a “corporate person being the corporate debtor”. The Hon’ble National Company Law Appellant Tribunal (NCLAT) in various judgments has held that pendency of actions under the SARFAESI Act or actions under RDB Act does not create obstruction for filing an application under IBC on the ground that provisions under IBC shall have overriding effect over any provisions inconsistent therewith contained in any other law for the time being in force. In this connection the decision of the Hon’ble NCLAT in Rakesh Kumar Gupta v. Mahesh Bansal & Ors. [2020] ibclaw.in 227 NCLAT order dated on 20.02.2020, may be referred to. Further on 26.02.2020, in the matter of Punjab National Bank v. M/s Vindhya Cereals Pvt. Ltd. [2020] ibclaw.in 239 NCLAT the question that arose before the Hon’ble NCLAT was whether subsequent to initiation of proceedings under the SARFAESI Act, a financial creditor can be precluded from filing an application under Section 7 of the Code