Assigned financial debt and pending recovery proceedings do not bar section 7 insolvency initiation when default is proved.

A signatory was treated as duly authorised where the board authority covered representation before courts, quasi-judicial bodies and related proceedings, and a verification defect was cured by supplementary affidavit. An assignee of a financial creditor was held competent to maintain a section 7 application because an assigned debt falls within the definition of financial creditor. Pendency of SARFAESI, High Court or DRT proceedings did not bar insolvency initiation, as the Code has overriding effect and no winding-up order or official liquidator appointment existed. On proof of financial debt, default and a proper application, the petition was admitted, moratorium commenced, and the interim resolution professional was appointed.

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Issues: (i) whether the person signing and filing the application was duly authorised to initiate proceedings under the Insolvency and Bankruptcy Code, 2016; (ii) whether an assignee of the original financial creditor could maintain an application under section 7 of the Insolvency and Bankruptcy Code, 2016; (iii) whether pendency of proceedings before the High Court and the Debt Recovery Tribunal barred the Tribunal from entertaining the application; and (iv) whether the application was liable to be admitted on proof of financial debt and default.

Issue (i): whether the person signing and filing the application was duly authorised to initiate proceedings under the Insolvency and Bankruptcy Code, 2016

Analysis: The authorisation in favour of the signatory covered representation before courts, quasi-judicial bodies and filing of winding-up petitions. The defect in the verification affidavit was cured by a supplementary affidavit. Proceedings under the Code were treated as covered by the existing board authority.

Conclusion: The signatory was duly authorised and the application was maintainable.

Issue (ii): whether an assignee of the original financial creditor could maintain an application under section 7 of the Insolvency and Bankruptcy Code, 2016

Analysis: A financial creditor includes a person to whom the debt has been legally assigned or transferred. The assignment deed transferred the debt to the applicant, and the respondent's own letters seeking settlement supported the existence of the transferred liability.

Conclusion: The assignee could maintain the application under section 7.

Issue (iii): whether pendency of proceedings before the High Court and the Debt Recovery Tribunal barred the Tribunal from entertaining the application

Analysis: Pendency of SARFAESI proceedings and a winding-up petition did not bar initiation of insolvency proceedings. The Code had overriding effect, and the material showed that no winding-up order had been passed and no official liquidator had been appointed.

Conclusion: The Tribunal had jurisdiction to entertain the application notwithstanding the pending proceedings elsewhere.

Issue (iv): whether the application was liable to be admitted on proof of financial debt and default

Analysis: The application was in proper form, the debt was established, the account had become non-performing, and the respondent had repeatedly acknowledged liability and sought one-time settlement. No disciplinary proceeding was pending against the proposed resolution professional.

Conclusion: The application was admitted and the corporate insolvency resolution process was directed to commence.

Final Conclusion: The petition was allowed, the corporate debtor was brought under moratorium, and the proposed interim resolution professional was appointed to conduct the insolvency resolution process in accordance with law.

Ratio Decidendi: A legally assigned financial debt may be enforced through section 7 proceedings by the assignee, and pendency of other recovery or winding-up proceedings does not bar admission of a valid insolvency application where no winding-up order has been passed.

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