Section 7 insolvency admission upheld where default was proved and no viable repayment proposal was offered

An application under section 7 of the Insolvency and Bankruptcy Code was admitted where default was supported by account statements and a banker's certificate showing overdue debt. The corporate debtor did not dispute liability in substance and merely sought more time for settlement. The Tribunal found that the debtor was not in a position to revive operations successfully or place any tangible repayment proposal before it, so the statutory requirements for admission were satisfied and the corporate insolvency resolution process was initiated.

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Issues: Whether the application under section 7 of the Insolvency and Bankruptcy Code, 2016 was liable to be admitted on proof of default and inability of the corporate debtor to make a viable proposal for repayment.

Analysis: The application was supported by account statements and a banker's certificate showing the overdue debt. The corporate debtor did not dispute the existence of liability in substance and sought further time for settlement. The Tribunal found that the corporate debtor was not in a position to revive its operations successfully or put forward any tangible proposal to clear the dues. In these circumstances, the statutory requirements for admission of the petition were satisfied.

Conclusion: The application under section 7 was admitted and corporate insolvency resolution process was initiated.

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