Financial debt and default established; limitation objection failed, leading to admission of the insolvency petition and moratorium.

Financial debt and default were found established on the documentary record, including loan papers, assignment deeds, account particulars and prior recovery steps, showing that the corporate debtor had availed financial facilities and failed to repay them. The Tribunal also treated the limitation objection as unsuccessful, relying on the mortgage-backed nature of the claim and Article 62 of the Limitation Act, 1963. On that basis, the section 7 requirements under the Insolvency and Bankruptcy Code, 2016 were satisfied, and the petition was admitted, triggering the corporate insolvency resolution process, appointment of an interim resolution professional and moratorium.

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Issues: Whether the financial creditor established a financial debt and default so as to justify admission of the petition under section 7 of the Insolvency and Bankruptcy Code, 2016, and whether the claim was barred by limitation.

Analysis: The petition was supported by loan documents, assignment deeds, account particulars and prior recovery steps, showing that the corporate debtor had availed financial facilities and had failed to repay the outstanding dues. The Tribunal also noted the earlier proceedings under the SARFAESI regime and the finding that the debt claim was not barred by limitation, with reliance on Article 62 of the Limitation Act, 1963 for enforcement of a mortgage-backed claim. On that basis, the Tribunal held that the debt due and payable and the default were established on the documentary record.

Conclusion: The requirements for admission under section 7 were satisfied and the petition was admitted, commencing the corporate insolvency resolution process, with appointment of an interim resolution professional and declaration of moratorium.

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