In Brief
A financial creditor filed an insolvency petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 against a company that was also subject to a pending winding-up petition in the High Court filed earlier under the Companies Act. The question was whether the Code proceedings could proceed independently. The Supreme Court held that insolvency proceedings under the Code are independent and must continue unimpeded by parallel winding-up petitions. Section 238 of the Code, which makes the Code's provisions override other laws, ensures that admitted insolvency applications take precedence. The Court clarified that Rules 26 and 27 of the Companies (Court) Rules refer to pre-admission notices. It also noted that under the amended Section 434 (2018), any party may apply to transfer a pending winding-up petition to the NCLT to be treated as a Code application. The appeal was disposed with liberty granted to the appellant to apply for transfer under that proviso.
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