Ritu Housing Finance Company Limited initiated Corporate Insolvency Resolution Process against its corporate debtor Raj Infrastructure Limited under section 7 of The Insolvency and Bankruptcy Code, 2016. The National Com

In the decided case of Indiabulls Housing Finance Limited V/s Shree Ram Urban Infrastructure Limited , the winding up proceedings against the corporate debtor had already been initiated by the Bombay High Court. Further, the fresh application for insolvency proceedings has been filed with NCLT Mumbai bench, which in turn had dismissed the application as the same was not maintainable in view of the fact that Hon'ble Bombay High Court already initiated the winding up proceedings. The corporate debtor appealed before National Company Law Appellate Tribunal and the tribunal examined the judgments and opined that once second stage i.e. liquidation (winding-up) proceedings has already been initiated, the question of reverting back to the first stage of Corporate Insolvency Resolution Process or preparation of Resolution Plan does not arise. While arriving at its judgment, the NCLAT relied on the case of Forech India Pvt. Itd. vs. Edelweiss assets reconstruction Company Ltd. & Aanr. , wherein the tribunal observed that if a Corporate insolvency resolution has started or on failure, if liquidation proceeding has been initiated against the Corporate debtor, the question of entertaining another application under Section 7 or Section 9 against the same very Corporate debtor does not arise, as it is open to the 'Financial Creditor and the 'Operational Creditor' to make claim before the Insolvency Resolution Professional/Official Liquidator. However, the matter went on appeal before the Hon'ble Supreme Court which declared by its judgment that the proceedings under Section 7 or 9 of the Code are independent proceedings and shall remain unaffected by the winding-up proceedings of the Companies Act. Thus, based on the above judgement given by Hon'ble Supreme Court, application filled by Ritu Housing Finance Company Limited under section 7 of the IBC code is maintainable.