Section 7 insolvency admission turns on debt and default, not the reason for non-payment under a restructuring arrangement.

A Section 7 application under the Insolvency and Bankruptcy Code, 2016 cannot be rejected merely because the corporate debtor had entered into a restructuring agreement if admitted debt and non-payment of scheduled instalments are shown. The Section 7 inquiry is limited to whether the application is complete and whether a debt and default exist; the reason for non-payment is irrelevant at the admission stage. On the record, the restructuring schedule was not honoured, default was established, and the challenge to admission failed.

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Issues: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was liable to be rejected on the ground that, despite an admitted debt and a restructuring arrangement, default in payment was not made out.

Analysis: The record showed a restructuring agreement containing a repayment schedule for the corporate debtor, and the scheduled instalments were not paid. The existence of a restructuring arrangement did not displace the statutory inquiry under Section 7, which is confined to whether the application is complete and whether a debt and default exist. The reason for non-payment was held to be irrelevant for declining admission at this stage.

Conclusion: The default was established and the challenge to admission of the Section 7 application failed. The appeal was dismissed.

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