Section 7 insolvency petition survives where default is proved by records and clerical defects do not defeat admission.

A section 7 insolvency petition was held maintainable because the financial creditor established default through account statements, demand and possession notices, admissions in the debtor's materials, and other contemporaneous records showing non-payment and NPA classification. The Tribunal treated the petition as complete and accepted the proposed interim resolution professional as eligible. Pending winding-up proceedings under the Companies Act did not bar initiation of insolvency because the Code has overriding effect. Clerical mistakes and technical defects in the creditor's papers, including an incorrect statutory reference, were treated as non-material and insufficient to defeat admission. The corporate insolvency resolution process was accordingly set in motion.

---

---

Issues: (i) Whether the petition under section 7 of the Insolvency and Bankruptcy Code, 2016 was maintainable and supported by sufficient evidence of default. (ii) Whether the objections based on pending winding-up proceedings, alleged defects in documentation, and clerical errors in the creditor's papers could defeat admission.

Issue (i): Whether the petition under section 7 of the Insolvency and Bankruptcy Code, 2016 was maintainable and supported by sufficient evidence of default.

Analysis: The application was examined on the basis of the financial creditor's records, including account statements, demand and possession notices, admissions in the corporate debtor's own materials, and other contemporaneous documents showing non-payment and classification of the account as NPA. The Tribunal held that under section 7(4) of the Insolvency and Bankruptcy Code, 2016 it may ascertain default from records or other evidence furnished by the financial creditor, and that the material placed before it established default. It also found the petition complete and the proposed interim resolution professional free from disciplinary proceedings.

Conclusion: The petition was found maintainable and the existence of default was held proved.

Issue (ii): Whether the objections based on pending winding-up proceedings, alleged defects in documentation, and clerical errors in the creditor's papers could defeat admission.

Analysis: The Tribunal held that pending proceedings under the Companies Act did not bar initiation of insolvency proceedings under the Insolvency and Bankruptcy Code, 2016, which has overriding effect. It further held that discrepancies such as an incorrect statutory reference in a certificate or other technical objections were clerical in nature and did not affect the substance of the claim. The objections were therefore rejected as lacking merit.

Conclusion: The objections were rejected and did not prevent admission of the petition.

Final Conclusion: The corporate insolvency resolution process was set in motion, with further steps directed for appointment of the interim resolution professional and consequential insolvency measures.

Ratio Decidendi: A section 7 application is admissible where the financial creditor establishes default through records or other evidence, and technical or clerical defects do not defeat admission when the petition is otherwise complete and the Code operates with overriding effect.

---