Assignee of financial debt may file insolvency petition when valid assignment and default are established on the record.

A legally assigned financial debt transfers the original lender's rights, securities and guarantees to the assignee, who then qualifies as a financial creditor for a section 7 insolvency application. The charge record does not control that status where the assignment itself is valid and the assignee steps into the lender's shoes. For admission of the insolvency petition, the relevant inquiry is whether default is shown on the record, supported by admissions, account statements and invocation notices; once debt and default are established, objections that do not negate them do not prevent admission and commencement of CIRP.

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Issues: (i) Whether the applicant, as assignee of the original lender's debt, qualified as a financial creditor entitled to maintain an application under section 7 of the Insolvency and Bankruptcy Code, 2016. (ii) Whether default by the corporate debtor and the guarantee invocation were established so as to justify admission of the insolvency application.

Issue (i): Whether the applicant, as assignee of the original lender's debt, qualified as a financial creditor entitled to maintain an application under section 7 of the Insolvency and Bankruptcy Code, 2016.

Analysis: The applicant relied on a registered assignment agreement by which the original lender transferred the underlying financial asset, together with the associated rights, securities and guarantees. The corporate debtor's objection that the assignment was not reflected in the charge records was rejected because the decisive question under section 7 was whether the debt had been legally assigned and whether the applicant stepped into the shoes of the original lender. The assignment did not extinguish the debtor's liability or the guarantor's obligation. On that basis, the applicant fell within the statutory definition of financial creditor as a person to whom a financial debt is owed and includes an assignee.

Conclusion: The issue was answered in favour of the applicant. The applicant was held to be a financial creditor competent to maintain the section 7 petition.

Issue (ii): Whether default by the corporate debtor and the guarantee invocation were established so as to justify admission of the insolvency application.

Analysis: The record contained admissions of default by the principal borrower, restructuring materials, account statements and the demand and invocation notices. The Tribunal applied the section 7 framework and held that, unlike a section 8 case, it need only satisfy itself that a default had occurred. The existence of dispute did not defeat the application once default and liability were shown. The materials were found sufficient to prove the debt and the default, and the application was complete in all respects.

Conclusion: The issue was answered in favour of the applicant. Default was proved and the application was admitted, with moratorium and appointment of the interim resolution professional directed.

Final Conclusion: The insolvency petition was admitted under section 7, moratorium was , and the corporate insolvency resolution process was initiated against the corporate debtor.

Ratio Decidendi: Under section 7 of the Insolvency and Bankruptcy Code, 2016, an assignee of a legally assigned financial debt is a financial creditor, and once default is proved on the basis of the record and supporting evidence, the application must be admitted notwithstanding objections that do not negate the debt or default.

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