Financial debt and default established on documentary evidence, leading to admission of the insolvency petition and moratorium.

Documentary evidence of disbursal of credit facilities, execution of security documents, acknowledgment of debt, account classification as non-performing asset, and the account statement was found sufficient to establish financial debt and default. Service of notice on the corporate debtor was treated as adequate, and the debtor's non-appearance after opportunities supported proceeding on the materials before the Tribunal. On that basis, the conditions for commencement of the corporate insolvency resolution process were satisfied, moratorium was directed, and an interim resolution professional and public announcement were ordered under the Insolvency and Bankruptcy Code, 2016.

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Issues: Whether the financial creditor had established existence of financial debt and default so as to warrant admission of the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016.

Analysis: The documentary record, including sanction of credit facilities, execution of security documents, acknowledgment of debt, declaration of the account as non-performing asset, and the account statement, showed that credit facilities had been advanced and repayment had not been made. Service of notice on the corporate debtor was held sufficient, and despite opportunities the corporate debtor did not appear. On the materials placed, the debt was found due and payable and the default was established. The conditions for commencement of the corporate insolvency resolution process were therefore satisfied, and moratorium was directed under Section 14 of the Insolvency and Bankruptcy Code, 2016 along with appointment of an interim resolution professional and public announcement.

Conclusion: The petition was admitted, and the corporate insolvency resolution process was ordered to commence against the corporate debtor.

Ratio Decidendi: Where the financial creditor produces documentary evidence showing disbursal of credit facilities and established default, the Adjudicating Authority may admit a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 and trigger moratorium and insolvency resolution consequences.

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