Section 7 insolvency maintainability unaffected by disputed claim quantum where mortgage-based limitation period is satisfied.

Admission of a Section 7 insolvency application was upheld where default was otherwise shown and the mortgage-backed claim fell within the 12-year limitation period applicable to mortgage enforcement under Article 62 of the Limitation Act. The limitation objection therefore failed. A dispute over the exact quantum of the financial creditor's claim did not bar maintainability, because disputed claims can still constitute debt under the Code and the precise amount payable is to be determined during the corporate insolvency resolution process after admission. The appeal was accordingly disposed of without interfering with admission on either ground.

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Issues: (i) Whether the appeal could succeed on the plea that the Section 7 insolvency application was barred by limitation; (ii) whether a dispute regarding the quantum of the financial creditor's claim prevented admission of the Section 7 application.

Analysis: The admitted mortgage of the corporate debtor's property attracted the 12-year limitation applicable to mortgage enforcement under Article 62 of the Schedule to the Limitation Act, 1963, so the limitation objection failed. The fact that the amount claimed was disputed did not render the Section 7 application unsustainable, because the Code treats disputed claims as capable of constituting debt and the question of the exact payable amount is to be worked out in the corporate insolvency resolution process after admission.

Conclusion: The limitation challenge was rejected, and the admission of the Section 7 application was not interfered with on the ground of dispute as to the claim amount.

Final Conclusion: The appeal was disposed of after affirming that a disputed financial claim does not bar Section 7 proceedings where default is otherwise shown and the claim is within the applicable limitation period.

Ratio Decidendi: For admission under Section 7, the existence of default is decisive, and a dispute as to the quantum of the financial creditor's claim does not defeat maintainability where limitation is otherwise satisfied.

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