Section 7 insolvency admission turns on proved debt, default, and limitation; acknowledgment extended time and section 10A did not apply.

For admission of a section 7 insolvency petition, the note states that proof of financial debt and default, together with a complete application, is sufficient to justify admission under the Insolvency and Bankruptcy Code, 2016. It further records that a written acknowledgment of debt extends limitation, allowing filing within three years of such acknowledgment. The note also states that section 10A does not apply where the default occurred before its insertion. On these principles, the section 7 application was admitted and CIRP was ordered to commence with moratorium and appointment of an interim resolution professional.

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Issues: (i) Whether the financial creditor established the existence of financial debt and default so as to warrant admission of the petition under section 7; (ii) whether the petition was barred by limitation or affected by the later insertion of section 10A.

Issue (i): Whether the financial creditor established the existence of financial debt and default so as to warrant admission of the petition under section 7.

Analysis: The corporate debtor's reply admitted liability and a proposal to repay the dues, which established the existence of debt and default. The application was also found complete, and the amount in default exceeded the minimum threshold under the Insolvency and Bankruptcy Code, 2016. Once default is established and the application is otherwise in order, admission follows.

Conclusion: The issue is decided in favour of the financial creditor. The petition was liable to be admitted.

Issue (ii): Whether the petition was barred by limitation or affected by the later insertion of section 10A.

Analysis: The debt had been acknowledged in writing, which extended the limitation period, and the petition was filed within three years of such acknowledgment. The date of default was also prior to the insertion of section 10A, so that provision had no application to the case.

Conclusion: The issue is decided in favour of the financial creditor. The petition was within limitation and was not hit by section 10A.

Final Conclusion: The application under section 7 was admitted and corporate insolvency resolution process was ordered to commence, together with the consequential moratorium and appointment of the interim resolution professional.

Ratio Decidendi: For admission of a section 7 petition, proof of financial debt and default, coupled with a complete application, requires admission; an acknowledgment of debt extends limitation, and section 10A does not apply to defaults predating its insertion.

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