Insolvency Law Prevails.

The Supreme Court held that insolvency proceedings under the IBC cannot be stalled merely because a scheme of arrangement under the Companies Act is pending or has been irregularly pursued. The Court emphasized that the IBC is a special statute aimed at corporate revival and financial discipline, and its provisions prevail over inconsistent provisions of other laws by virtue of Section 238 of the IBC. In the present case, the Court found that the scheme of arrangement relied upon by the corporate debtor had become inoperative and redundant due to gross delays, non-compliance with statutory timelines, and withdrawal of creditor consent. Since the scheme had never effectively come into force, it could not be used as a basis to suspend insolvency proceedings. The Court therefore set aside the order of the NCLAT which had stayed the CIRP proceedings and restored the order of the National Company Law Tribunal (NCLT) initiating insolvency proceedings against the corporate debtor. The Interim Resolution Professional (IRP) was permitted to continue the CIRP process.