Authorised filing, no prematurity bar, and conflict-free IRP substitution supported admission of the insolvency petition.

A section 7 IBC application was held maintainable when filed by a bank officer duly authorised under the bank's governing provisions; the absence of an earlier notification expressly referring to insolvency proceedings did not negate general authority to sign and complete pleadings. The petition was also found not premature, because the RBI timeline still permitted resolution within the stipulated period and the Joint Lender Forum proposal had already been rejected, so parallel restructuring discussions did not bar recourse to the Code. An apprehended conflict concerning the proposed Interim Resolution Professional was cured by substitution, and the new professional's independence and eligibility were verified. The application was admitted and CIRP commenced.

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Issues: (i) whether the application under section 7 of the Insolvency and Bankruptcy Code, 2016 was validly instituted by an authorised officer of the financial creditor; (ii) whether the petition was premature in view of the Reserve Bank of India timeline and pending Joint Lender Forum process; (iii) whether the proposed Interim Resolution Professional could be replaced because of a possible conflict of interest.

Issue (i): whether the application under section 7 of the Insolvency and Bankruptcy Code, 2016 was validly instituted by an authorised officer of the financial creditor.

Analysis: The authorisation of the Bank was examined in the light of section 27 of the State Bank of India Act, 1955 and Regulations 76 and 77 of the State Bank of India General Regulations, 1955. The Chairperson was held to have wide powers to act for the Bank, including signing and completion of pleadings and applications through an empowered officer. The absence of a specific reference to insolvency proceedings in the earlier notification did not defeat the authority when the general power to sign petitions and legal documents was already available.

Conclusion: The objection to maintainability on the ground of lack of authority was rejected, and the application was held to have been validly filed.

Issue (ii): whether the petition was premature in view of the Reserve Bank of India timeline and pending Joint Lender Forum process.

Analysis: The timeline in the Reserve Bank of India communication was construed as permitting resolution within the stipulated period, and the Joint Lender Forum proposal had already been rejected before the petition was filed. The pendency of restructuring discussions did not create a legal bar to the initiation of insolvency proceedings under the Code, and the existence of a possible resolution process outside the Code did not prevent recourse to the statutory remedy.

Conclusion: The plea of prematurity was rejected.

Issue (iii): whether the proposed Interim Resolution Professional could be replaced because of a possible conflict of interest.

Analysis: In view of the objection raised, the financial creditor substituted the proposed professional. The substituted person furnished the required written communication and declaration of independence, and his registration and eligibility were verified. Once the replacement removed the apprehended conflict, no further objection survived.

Conclusion: The replacement was accepted and the new Interim Resolution Professional was appointed.

Final Conclusion: The application was admitted, corporate insolvency resolution process was triggered, moratorium was , and the substituted Interim Resolution Professional was appointed to proceed with the insolvency process.

Ratio Decidendi: A section 7 insolvency application is maintainable when instituted by an officer duly authorised under the bank's governing provisions, and the pendency of a separate lender resolution exercise does not bar admission once default is established and no approved resolution exists.

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