Section 7 IBC admission upheld despite MSME and limitation objections, with balance-sheet acknowledgment supporting default.

A Section 7 IBC application by a financial creditor was found maintainable on the basis of loan documents and default records showing disbursal and non-payment. Objections based on MSME status, alleged illegality of NPA classification, and an asserted failure to restructure were not treated as bars at the admission stage, and the corporate debtor's balance-sheet entries were treated as acknowledgment of liability. The plea of limitation under Article 137 of the Limitation Act, 1963 was rejected on that basis. The application was also found complete and the proposed interim resolution professional was found eligible, leading to admission and initiation of the CIRP.

---

---

Issues: Whether the financial creditor's application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was maintainable and liable to be admitted despite objections based on MSME status, restructuring, and limitation.

Analysis: The application was supported by loan documents and default materials showing disbursal of financial assistance and non-payment. The corporate debtor's objections regarding MSME protections, alleged illegality of the NPA classification, and alleged failure to restructure were not treated as bars to admission at the Section 7 stage. The account entries in the corporate debtor's balance sheet were treated as acknowledgement of liability, and therefore the plea of limitation under Article 137 of the Limitation Act, 1963 was rejected. The application was also found complete, and the proposed interim resolution professional was found eligible.

Conclusion: The application was admitted and the corporate insolvency resolution process was initiated in favour of the financial creditor.

---