ABC Housing Ltd had initiated Corporate Insolvency Resolution Process against XYZ Infrastructure Ltd. (Corporate Debtor) under Section 7 of the Insolvency and Bankruptcy Code, 2016. The National Company Law Tribunal has

In the matter of Indiabulls Housing Finance Ltd. vs. Shree Ram Urban Infrastructure Ltd. , the Indiabulls Housing Finance Ltd. Appellant had initiated Corporate Insolvency Resolution Process against Shree Ram Urban Infrastructure Ltd (Corporate Debtor) under Section 7 of the Insolvency and Bankruptcy Code, 2016. The National Company Law Tribunal, Mumbai Bench by impugned order dated 18th May, 2018 dismissed the application as not maintainable in view of the fact that the winding-up proceeding against the Corporate Debtor had already been initiated by the High Court of Bombay. Thus, the issue that fell for consideration before the National Company Law Appellate Tribunal was whether an application under Section 7 of the Code is maintainable when winding-up proceeding against the Corporate Debtor has already been initiated? In the said appeal, the NCLAT examined judgments governing the issue to hold that the High Court of Bombay has already ordered for winding-up of Corporate Debtor, which is the second stage of the proceeding, thus question of initiation of 'Corporate Insolvency Resolution Process' which is the first stage of resolution process against the same Corporate Debtor does not arise. While arriving at its judgment, the NCLAT relied on the case of Forech India Pvt. Ltd. vs. Edelweiss Assets Reconstruction Company Ltd. & Anr. , wherein the NCLAT 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 of the Insolvency and Bankruptcy Code (IBC) 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. The NCLAT further 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. In view of the facts of the present case, the NCLAT concluded that as the High Court of Bombay had already ordered winding-up of Corporate Debtor and the same has been initiated, therefore, initiation of Corporate Insolvency Resolution Process against the Corporate Debtor did not arise.