Financial Creditor can file Application u/s 7 of IBC even after Initiation of Recovery Proceedings before DRT: NCLAT

The NCLAT ruled that a financial creditor can still file an application under Section 7 of the Insolvency and Bankruptcy Code (IBC) even after the initiation of recovery proceedings before the Debt Recovery Tribunal (DRT). The ruling came after a financial creditor sought to trigger insolvency proceedings against a corporate debtor, despite ongoing recovery actions. The NCLAT emphasized that IBC proceedings under Section 7 are separate from DRT actions and that both can run concurrently. This decision provides clarity on the ability of creditors to pursue insolvency remedies under the IBC, even when other legal actions are in progress.