When Entire Liability Is Not Discharged After Selling Pledged Shares, Application U/S 7 IBC Can Be Filed To Claim Remaining Amount: NCLAT

The NCLAT ruled that an application under Section 7 of the Insolvency and Bankruptcy Code (IBC) can still be filed even if the entire liability is not discharged after selling pledged shares. In this case, a financial creditor filed an insolvency petition after the sale of pledged shares left an outstanding balance. The NCLAT upheld that partial discharge of liability does not bar the initiation of insolvency proceedings. The court noted that the financial creditor has the right to approach the tribunal for recovery of the remaining debt under IBC, even after the realization of pledged assets. This ruling clarifies the scope of creditor rights under the IBC when partial recovery of dues occurs.