Section 7 insolvency admission turns on proof of default, not disputes over debt quantum, assignment, or parallel recovery proceedings.

Section 7 of the Insolvency and Bankruptcy Code requires proof of financial debt, default, a complete application, and no disciplinary proceedings against the proposed resolution professional. On the facts described, the applicant relied on loan documents, security documents, ledger statements, acknowledgements of debt, and assignment papers to show that the corporate debtor had availed financial facilities and defaulted in repayment. The tribunal treated disputes over the quantum of debt, the assignment of debt, and pending recovery proceedings before the Debts Recovery Tribunal as insufficient to defeat admission once default was established and the statutory requirements were met. The application was therefore admitted and CIRP was initiated.

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Issues: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was maintainable and liable to be admitted on proof of default, notwithstanding the respondent's dispute regarding the amount due, the assignment of debt, and the pending recovery proceedings.

Analysis: The applicant produced the loan documents, security documents, ledger statements, acknowledgements of debt, and other material showing that the corporate debtor had availed financial facilities and had defaulted in repayment. The respondent's account had been declared non-performing, and the debt had been assigned to the applicant under the assignment agreement. The Tribunal held that for admission under Section 7, the decisive requirements are existence of default, completeness of the application, and absence of disciplinary proceedings against the proposed resolution professional. It further held that disputes as to the quantum of debt, the assignment, or the pendency of proceedings before the Debts Recovery Tribunal do not bar admission where default is established and the application otherwise satisfies the statutory requirements.

Conclusion: The application was held admissible and the Corporate Insolvency Resolution Process was ordered to be initiated against the corporate debtor.

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