Section 7 insolvency admission turns on proof of financial debt, default, complete application, and clean interim resolution professional disclosure.

A Section 7 insolvency application may be admitted when the record shows financial debt, default, and compliance with the filing requirements under the Insolvency and Bankruptcy Code. On the facts recorded, the corporate debtor had availed credit facilities, acknowledged the debt, and failed to repay despite notice; the application was filed in the prescribed form with the requisite fee; and the proposed interim resolution professional disclosed that no disciplinary proceedings were pending. The Authority therefore treated the petition as complete, found the statutory requirements satisfied, and declared moratorium under Section 14.

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Issues: Whether default in repayment of financial debt was established and whether the section 7 application was complete so as to admit the insolvency petition and declare moratorium.

Analysis: The records showed that the corporate debtor had availed credit facilities from the financial creditor, had acknowledged the debt, and had failed to repay the outstanding amounts despite notice. The application was filed in the prescribed form with the requisite fee, and the proposed interim resolution professional had filed the required communication showing that no disciplinary proceedings were pending. On these materials, the Authority found the existence of financial debt, default, and compliance with the statutory requirements for admission under the insolvency code.

Conclusion: The petition was admissible and was admitted, with moratorium declared under section 14 of the Insolvency and Bankruptcy Code, 2016.

Ratio Decidendi: A section 7 application is to be admitted when the record establishes financial debt and default, the application is otherwise complete, and the proposed interim resolution professional is not shown to be under any disciplinary proceeding.

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