application to NCLT

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hello frnds

plz offer ur views whether a financial creditor can file a resolution with the NCLT against a defaulting corporate debtor, where as the matter is sub judice before the High court/ supreme court.

if yes under which provisions of IBC 2016.

plz revert back

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    Yes. A financial creditor, either individually or jointly with other financial Creditors may file an application with the NCLT against a defaulting corporate debtor provided the default amounts to at least Rs. 1 crore.

    Such an application may be filed after 15th July 2017 even if a winding up petition is pending or admitted before the High Court but winding up order has not been passed. Appeals from the orders of NCLT may be preferred with the NCLAT and thereafter to the Supreme Court.

    Relevant Provisions

    Section 4 and Section 7 of the Insolvency and Bankruptcy Code 2016, provide for a financial creditor singly or jointly with other financial creditors to file an application before NCLT against a corporate debtor where the minimum amount of the default is 1 crore rupees w.e.f. 24th March , 2020 (previously Rs. 1 lakh.)
    Under the Companies Act, 2013, Rule 5 of the Companies (Transfer of Pending Proceedings) Rules, 2016, where the petition has not been served on the respondent for Winding up matters under rule 26 of the Companies (Court) Rules, 1959, it can be transferred to the NCLT.

    However, under the second proviso to Rule 5, after 15th July 2017, the Financial Creditors may file fresh applications to the NCLT for initiating Corporate Insolvency Resolution Process. It can be inferred that NCLT may hear insolvency matters on application even if a winding up petition is pending or admitted before the High Court, unless the winding up order is passed.

    Case law reference:

    1. In a decision of Bombay High Court in Jotun India Pvt Ltd Vs PSL, it was held that once a petition has been admitted by the NCLT, it can declare moratorium with reference to section 14 of the Code under which no court can entertain or continue with the winding-up petition against the same corporate debtor.

    2. In a decision of the Bombay High Court in West Hill Reality case, it held that once a petition has been served by the applicant to the respondent company as contemplated under rule 26 of the Court Rules read with rule 5 of the Transfer Rules 2016, the High Court seizes of the matter and it cannot be transferred to the NCLT.

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