Financial debt and default proved for insolvency admission; CIRP commenced, moratorium ordered, and Interim Resolution Professional appointed.

Financial debt and default were established on the basis of loan sanction documents, account statements, ledger entries, a CIBIL extract, charge records and an acknowledgment of debt by the corporate debtor. The account had been classified as NPA, and no repayment was shown. As the corporate debtor did not contest the petition, the requirements for admission under section 7 of the Insolvency and Bankruptcy Code, 2016 were found satisfied. The application was admitted, Corporate Insolvency Resolution Process was directed to commence, moratorium and public announcement were ordered, and the proposed Interim Resolution Professional was appointed on the basis of the required written communication and disclosure.

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Issues: Whether the financial creditor proved the existence of a financial debt and default so as to justify admission of the application under section 7 of the Insolvency and Bankruptcy Code, 2016 and the consequential commencement of CIRP, moratorium, and appointment of an Interim Resolution Professional.

Analysis: The application was supported by the loan sanction documents, account statements, ledger entries, CIBIL extract, charge records, and an acknowledgement of debt by the corporate debtor. The account had also been classified as NPA and demand was raised without repayment. The corporate debtor did not appear to contest the petition. On the material placed, the requirements for maintaining an under section 7 were found satisfied, and the existence of default stood established. The proposed Interim Resolution Professional was also supported by the required written communication and disclosure.

Conclusion: The application under section 7 was admitted, CIRP was directed to commence, moratorium was ordered, public announcement was directed, and the Interim Resolution Professional was appointed.

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