Section 7 insolvency application maintained as debt, default, limitation extension, and authorization objections were rejected

An application under section 7 of the Insolvency and Bankruptcy Code was found complete and maintainable because the loan transaction, debtor-creditor relationship, and default in repayment were admitted on the record. The tribunal held that part-payments made after the first default extended limitation under section 18 of the Limitation Act, so the 2019 petition remained within time because payments continued up to April 2016. Objections based on absence of Form II and challenge to the signatory's authority were rejected, as the form was later filed and the power of attorney was treated as sufficient authorisation.

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Issues: Whether the application under section 7 of the Insolvency and Bankruptcy Code, 2016 was maintainable and complete, whether debt and default were established, whether the application was within limitation, and whether the objections regarding authorization and form were sustainable.

Analysis: The parties admitted the existence of a loan transaction and the record showed default in repayment. The tribunal treated the debtor-creditor relationship and the outstanding liability as sufficiently established for admission under section 7. On limitation, the tribunal held that part-payments made after the first default extended the limitation period under section 18 of the Limitation Act, 1963, and that the petition filed in 2019 was within time because payments continued up to April 2016. The objection that the petition was defective for want of Form II was not accepted since the form was later produced. The challenge to the authority of the signatory was also rejected in view of the prior appellate ruling relied upon by the tribunal, and the filed power of attorney was treated as sufficient authorization.

Conclusion: The application was held to be complete, maintainable, and within limitation, and debt and default were found to be established.

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