In Brief
Kotak Mahindra Bank advanced loans to appellants' companies totaling approximately INR 48 crores. After obtaining decrees from the Debts Recovery Tribunal and issuing recovery certificates, the bank filed a winding up petition claiming the companies were commercially insolvent. The appellants argued that once a secured creditor obtains a DRT decree, it cannot file a winding up petition without relinquishing security, as the Recovery of Debts Act grants exclusive jurisdiction to the DRT. The Supreme Court dismissed the appeals, holding that winding up proceedings are not "recovery of debts" proceedings barred by the Recovery of Debts Act's exclusive jurisdiction. A secured creditor's obligation to elect regarding security arises only at the proof-of-claims stage after a winding up order, not when filing the petition. The court approved pursuing parallel DRT and winding up remedies as escalating the same right rather than electing between alternatives.
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