Section 7 insolvency admission turns on proved default and complete filings; pending restructuring does not by itself bar CIRP commencement.

In a Section 7 insolvency proceeding, complete applications supported by documentary evidence and an undisputed default were treated as maintainable, and the signatory objection failed because authorised bank officers could sign on the lender's behalf under applicable regulations. Section 7(5)(a) was read as conferring judicial discretion, but pending debt restructuring was not treated as a bar to admission where default was otherwise established. On admission, the Interim Resolution Professional proposed by the lenders could be appointed and the statutory consequences followed, including moratorium, public announcement, and invitation of claims.

---

---

Issues: (i) Whether the applications under Section 7 of the Insolvency and Bankruptcy Code, 2016 were maintainable and complete, including the competence of the signatory and the existence of default in repayment of financial debt; (ii) whether the Adjudicating Authority was bound to admit a complete Section 7 application or could exercise discretion in light of the ongoing debt restructuring process and the consequences of admission; (iii) whether the Interim Resolution Professional proposed by the lenders could be appointed and moratorium and other consequential directions could be issued on admission.

Issue (i): Whether the applications under Section 7 of the Insolvency and Bankruptcy Code, 2016 were maintainable and complete, including the competence of the signatory and the existence of default in repayment of financial debt.

Analysis: The applications were filed by financial creditors and the corporate debtor did not dispute the debt or the occurrence of default. The objection to the signatory was rejected on the basis of the State Bank of India General Regulations, 1955, under which authorised officers could sign pleadings and applications on behalf of the bank. The record also showed compliance with the application requirements, documentary support for the debt, and no disciplinary proceeding against the proposed resolution professionals.

Conclusion: The applications were held to be complete and maintainable, default in repayment of financial debt was established, and the signatory objection failed.

Issue (ii): Whether the Adjudicating Authority was bound to admit a complete Section 7 application or could exercise discretion in light of the ongoing debt restructuring process and the consequences of admission.

Analysis: The expression used in Section 7(5)(a) was treated as conferring judicial discretion, to be exercised on satisfaction regarding default, completeness, and other relevant statutory requirements. The ongoing restructuring efforts and the complexity of the corporate debtor's affairs were considered, but they were held not to bar commencement of insolvency, since the Code is designed to achieve resolution within a time-bound framework and does not make pending restructuring a ground to refuse admission where default is otherwise proved.

Conclusion: The Adjudicating Authority held that it could exercise discretion, but on the facts the applications merited admission.

Issue (iii): Whether the Interim Resolution Professional proposed by the lenders could be appointed and moratorium and other consequential directions could be issued on admission.

Analysis: The Court held that there was no legal impediment to appointing the Interim Resolution Professional on the same day as admission, and that the selection of the professional recommended through the Joint Lenders Forum was on the facts. Upon admission, the statutory consequences under Sections 13, 14, 15 and 16 followed, including moratorium, public announcement, and invitation of claims.

Conclusion: The proposed Interim Resolution Professional was appointed, moratorium was declared, and consequential CIRP directions were issued.

Final Conclusion: Both insolvency applications were admitted, corporate insolvency resolution process commenced against the corporate debtor, and the statutory moratorium and incidental directions were brought into force.

Ratio Decidendi: In a Section 7 proceeding, once default by a financial debtor is established and the application is complete with no disciplinary impediment, the Adjudicating Authority may assess the surrounding facts but a pending restructuring exercise does not by itself prevent admission or the statutory commencement of insolvency resolution.

---