In Brief
This case addresses whether a secured creditor that has obtained a judgment from the Debts Recovery Tribunal can simultaneously file a winding-up petition under the Companies Act. The bank had advanced loans to the companies, obtained DRT orders for Rs. 48 crores, but recovery was unsuccessful. It then filed winding-up petitions. The companies argued that the Recovery of Debts Act bars such petitions and that a secured creditor must relinquish its security before petitioning for winding-up. The Supreme Court held that winding-up is not a debt recovery proceeding and thus not barred by the Recovery Act; a secured creditor need not give up security until the claims-proving stage after a winding-up order; and pursuing both remedies simultaneously is legitimate pursuit of a single right in a larger degree. Appeals dismissed.
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