Section 7 insolvency admission follows once financial debt and default are shown in a complete application.

A section 7 application under the Insolvency and Bankruptcy Code was admitted because the financial creditor supported the claim with loan documents, bank records, assignment papers, recovery material and evidence of outstanding liability. The corporate debtor did not meaningfully dispute the financial debt or default and repeatedly sought time for settlement, which reinforced the existence of liability and default. As the application was complete and procedural requirements were complied with, the adjudicating authority applied the principle that established default requires admission. The corporate insolvency resolution process was commenced, moratorium followed, and the proposed interim resolution professional was appointed.

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Issues: Whether the financial creditor established the existence of financial debt and default so as to warrant admission of the petition under section 7 of the Insolvency and Bankruptcy Code, 2016 and commencement of the corporate insolvency resolution process.

Analysis: The petition was supported by loan documents, bank records, assignment documents, recovery proceedings and the stated outstanding liability. The corporate debtor did not dispute the existence of financial debt or default in substance and also sought time for settlement on multiple occasions, which supported the existence of liability and default. Applying the governing principle that once the adjudicating authority is satisfied that a default has occurred the application must be admitted unless it is incomplete, the requirements for admission were found to be satisfied. The financial creditor had also complied with the procedural requirements and proposed an interim resolution professional with written consent.

Conclusion: The petition was admitted, the corporate insolvency resolution process was commenced, and the application was allowed in favour of the petitioner.

Final Conclusion: The adjudicating authority accepted the insolvency claim, initiated CIRP against the corporate debtor, and imposed moratorium with appointment of the proposed interim resolution professional.

Ratio Decidendi: Once default is established in a complete application under section 7 of the Insolvency and Bankruptcy Code, 2016, the adjudicating authority must admit the application and commence CIRP.

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