Section 7 insolvency admission upheld where debt, default, authorisation and IRP eligibility were established despite parallel recovery actions.

A section 7 application under the Insolvency and Bankruptcy Code was found maintainable where the bank had internal approval and specific authorisation for the officer who filed it. Loan records, certified account statements, balance confirmation and NPA classification were treated as sufficient to show financial debt and default, and the pendency of SARFAESI and recovery proceedings did not bar insolvency recourse because of the Code's overriding effect. Defects in the proposed interim resolution professional's papers were cured, consent was filed, and no disciplinary proceeding was pending. The petition was admitted, CIRP commenced, and moratorium was declared.

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Issues: (i) Whether the financial creditor was duly authorised to file the application under section 7 of the Insolvency and Bankruptcy Code, 2016. (ii) Whether the record established a financial debt and default so as to justify admission of the section 7 application notwithstanding the pendency of SARFAESI and recovery proceedings. (iii) Whether the application was complete and the proposed interim resolution professional was eligible for appointment.

Issue (i): Whether the financial creditor was duly authorised to file the application under section 7 of the Insolvency and Bankruptcy Code, 2016.

Analysis: The application was supported by internal permission from the competent authority and a specific authorisation enabling the named officer to sign, file and verify the insolvency application on behalf of the bank. The objection that the representative lacked authority was therefore unsustainable.

Conclusion: The objection to authorisation was rejected and the filing of the application was held to be valid.

Issue (ii): Whether the record established a financial debt and default so as to justify admission of the section 7 application notwithstanding the pendency of SARFAESI and recovery proceedings.

Analysis: The loan documents, account statements certified under the Banker's Books Evidence Act, the balance confirmation, and the declaration of the account as non-performing asset showed the existence of a financial debt and default. The Tribunal held that it is not required to quantify the exact amount due in a summary proceeding and that pendency of SARFAESI or recovery proceedings does not bar recourse to insolvency proceedings, in view of the overriding effect of the Code.

Conclusion: Default was held to be established and the pendency of other recovery proceedings did not prevent admission.

Issue (iii): Whether the application was complete and the proposed interim resolution professional was eligible for appointment.

Analysis: The defect pointed out regarding the proposed interim resolution professional's certification had been cured by filing the amended form. The proposed professional had also filed consent and confirmed that no disciplinary proceeding was pending. The statutory requirements for admission were therefore satisfied.

Conclusion: The application was held complete and the proposed interim resolution professional was found eligible for appointment.

Final Conclusion: The section 7 petition was admitted, the corporate insolvency resolution process was initiated, moratorium was declared, and an interim resolution professional was appointed to take further statutory steps.

Ratio Decidendi: For admission under section 7 of the Insolvency and Bankruptcy Code, 2016, the adjudicating authority must be satisfied that a financial debt exists, default has occurred, the application is complete, and no disciplinary proceeding is pending against the proposed interim resolution professional; disputed quantum or parallel recovery proceedings do not by themselves defeat admission.

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