Section 7 IBC maintainability and default were confirmed despite restructuring, leading to admission of the insolvency application.

A section 7 IBC application was found maintainable where the bank's general power of attorney, together with a later circular resolution, authorised designated officers to institute proceedings and sign the petition. The objection based on filing through an authorised representative was rejected. On default, the record of disbursal, non-performing asset classification, recall notices, acknowledgements of debt, and credit-report material showed non-payment of financial debt when due and payable. Claimed restructuring did not erase default, because the account continued to be assessed against the pre-restructuring repayment schedule. The application was admitted, triggering corporate insolvency resolution process and moratorium directions.

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Issues: (i) Whether the petition under section 7 of the Insolvency and Bankruptcy Code, 2016 was maintainable in view of the authorisation to file it. (ii) Whether the corporate debtor had committed default in repayment of financial debt, including where the account was restructured or claimed to be under a revised repayment schedule.

Issue (i): Whether the petition under section 7 of the Insolvency and Bankruptcy Code, 2016 was maintainable in view of the authorisation to file it.

Analysis: The filing was supported by a general power of attorney and a later circular resolution authorising designated officers of the bank to institute proceedings before the adjudicating authority and sign the requisite papers. The objection that a power of attorney holder could not file the petition was rejected because the authorisation was adequate and covered the present proceeding.

Conclusion: The petition was maintainable; the objection to filing was rejected.

Issue (ii): Whether the corporate debtor had committed default in repayment of financial debt, including where the account was restructured or claimed to be under a revised repayment schedule.

Analysis: Default under section 3(12) means non-payment of debt when due and payable. The record showed disbursement of financial facilities, classification of the account as non-performing, recall notices, acknowledgements of debt, and material from credit reports indicating persistent default. The asserted restructuring did not displace default, because upon restructuring a non-performing asset continues to retain its earlier classification with reference to the pre-structuring repayment schedule. The adjudicating authority therefore found sufficient proof of financial debt and default.

Conclusion: Default was established against the corporate debtor.

Final Conclusion: The application under section 7 was admitted, the corporate insolvency resolution process was triggered, and moratorium and interim resolution professional directions followed as a consequence of admission.

Ratio Decidendi: For admission of a section 7 application, the adjudicating authority must be satisfied that a financial debt exists and that default has occurred; where authorisation is valid and the debt remains due and payable despite claimed restructuring, the application is admissible.

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