IBC section 7 admission upheld where default, authority, and documentary proof of corporate debtor liability were established.

An application under section 7 of the Insolvency and Bankruptcy Code was admitted where the petition was complete, default was shown, the corporate debtor's account had been classified as NPA, and no disciplinary proceedings were pending against the proposed resolution professional. The Tribunal held that the authorised signatory had proper authority and that the statement of accounts was supported by a certificate under the Bankers' Books Evidence Act, curing admissibility objections. It further found that the loan documents, charge creation and related consents established the corporate debtor's liability and that objections on disbursement or co-borrower status did not defeat default. The insolvency application was admitted, an interim resolution professional was appointed, and moratorium was declared.

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Issues: (i) Whether the application under section 7 of the Insolvency and Bankruptcy Code, 2016 was complete and default had occurred so as to warrant admission; (ii) Whether the petition was maintainable on the basis of the authorization and supporting accounts evidence; (iii) Whether the objections regarding disbursement to the association and the alleged absence of the corporate debtor's liability defeated admission.

Issue (i): Whether the application under section 7 of the Insolvency and Bankruptcy Code, 2016 was complete and default had occurred so as to warrant admission.

Analysis: The application was filed in the prescribed form, the date of default was disclosed, the account of the corporate debtor had been declared NPA, and the record showed outstanding dues and a default reflected in the material placed before the Tribunal. The proposed interim resolution professional had also confirmed that no disciplinary proceedings were pending. On these facts, the statutory requirements for admission were satisfied.

Conclusion: This issue was answered in favour of the petitioner.

Issue (ii): Whether the petition was maintainable on the basis of the authorization and supporting accounts evidence.

Analysis: The letter of authority empowered the authorized signatory to institute and prosecute proceedings before tribunals. The statement of accounts was supported by a certificate under the Bankers' Books Evidence Act, 1891, curing the objection raised against its admissibility. The authorization and documentary foundation of the petition were therefore found sufficient.

Conclusion: This issue was answered in favour of the petitioner.

Issue (iii): Whether the objections regarding disbursement to the association and the alleged absence of the corporate debtor's liability defeated admission.

Analysis: The loan documentation, charge creation, consent documents, and the loan agreement showed the corporate debtor's participation as a co-borrower and its role in the secured transaction. The Tribunal also noted that the corporate debtor had executed the relevant documents and that the objections raised did not negate the existence of debt or default.

Conclusion: This issue was answered in favour of the petitioner.

Final Conclusion: The insolvency application was admitted, an interim resolution professional was appointed, and moratorium under the Code was declared.

Ratio Decidendi: An application under section 7 of the Insolvency and Bankruptcy Code, 2016 is liable to be admitted where default is shown, the application is complete, no disciplinary proceedings are pending against the proposed resolution professional, and the documentary record establishes the corporate debtor's liability notwithstanding collateral objections to authorization or the manner of disbursement.

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