Section 7 insolvency petition sustained on documentary proof of debt, default, and limitation; CIRP admitted.

An application under section 7 of the Insolvency and Bankruptcy Code was found maintainable on documentary proof of financial debt and default. Loan sanction papers, the loan agreement, acknowledgments, account statements, default computation, and the NPA record established the debt and non-payment. The objection that the facility had been advanced only to a trust was rejected because the corporate debtor had jointly executed the loan arrangement. The mismatch in the default date was treated as a typographical error, and the application was held to be within limitation. CIRP was initiated and an Interim Resolution Professional was appointed.

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Issues: Whether the application under section 7 of the Insolvency and Bankruptcy Code, 2016 was maintainable and admissible on proof of financial debt, default, and limitation.

Analysis: The application was supported by the loan sanction documents, loan agreement, acknowledgments, statements of account, default computation, and record of NPA. The objection that the loan had been advanced only to a trust was rejected because the documents showed that the corporate debtor had jointly executed the loan arrangement. The discrepancy in the date of default was treated as a typographical error, and the application was found to be within limitation. On the documentary record, the adjudicating authority was satisfied that a financial debt existed and that default had occurred.

Conclusion: The application under section 7 was held to be complete, within limitation, and liable to be admitted. CIRP was initiated and an Interim Resolution Professional was appointed.

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