Section 7 insolvency admission follows proof of financial debt, default, creditor status, and compliant IRP appointment.

An insolvency application under section 7 of the Insolvency and Bankruptcy Code, 2016 was found maintainable where the record showed a financial debt and default within the meaning of sections 3(11) and 3(12). The assignee of the original lender's debt was treated as a financial creditor under section 5(7), so it had locus to seek initiation of the corporate insolvency resolution process. The materials also showed substantial compliance with section 7 requirements, and the proposed interim resolution professional had given consent and disclosed no pending disciplinary proceeding. The application was admitted, moratorium was imposed, and the interim resolution professional was appointed.

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Issues: Whether the insolvency application under section 7 of the Insolvency and Bankruptcy Code, 2016 was maintainable on proof of financial debt and default, and whether the corporate insolvency resolution process should be admitted with moratorium and appointment of an interim resolution professional.

Analysis: The petition was supported by materials showing the existence of a financial debt and default within the meaning of sections 3(11) and 3(12) of the Insolvency and Bankruptcy Code, 2016. The applicant, as assignee of the original lender's financial debt, fell within the definition of financial creditor under section 5(7) of the Insolvency and Bankruptcy Code, 2016. The record also showed substantial compliance with the requirements for invoking section 7 of the Insolvency and Bankruptcy Code, 2016. The proposed interim resolution professional had given consent and disclosed that no disciplinary proceeding was pending.

Conclusion: The application under section 7 of the Insolvency and Bankruptcy Code, 2016 was admitted, moratorium was , and the proposed interim resolution professional was appointed.

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