Pawan Kumar Vs Central Bank of India & Ors. (NCLAT Delhi)
NCLAT Delhi held that initiated proceedings before the Debts Recovery Tribunal does not preclude Financial Creditors to take remedy under Section 7, which is a special remedy provided under the IBC.
Facts- The Corporate Debtor was extended a loan by Consortium of Bank, consisting of Oriental Bank of Commerce and Central Bank of India by an Agreement dated 06.03.2017. Central Bank of India declared the account of Corporate Debtor as NPA with effect from 30.09.2017. The Oriental Bank of Commerce, the lead Bank also declared the account of Corporate Debtor as NPA on 31.08.2017. Central Bank of India filed application before Debts Recovery Tribunal (“DRT”) for recovery of its outstanding dues. Oriental Bank of Commerce also filed application against the CD.
Section 7 Application was filed by Central Bank of India praying for initiation of CIRP against CD on 19.09.2018. Section 7 Application was also filed by Oriental Bank of Commerce (Now Punjab National Bank) against the CD.
This Appeal has been filed by the Suspended Director of the Corporate Debtor on 28.05.2024, challenging the order admitting Section 7 Application.
Conclusion- It is well settled law that the fact that Financial Creditor has initiated proceedings before the DRT does not preclude them to take remedy under Section 7, which is a special remedy provided under the IBC.
