Financial debt and default under insolvency law proved through loan records, revived liability, and independent remedy despite SARFAESI action.

Existence of financial debt and default was established from loan documents, mortgage and guarantee arrangements, acknowledgement of liability, assignment of the debt to the petitioner, NPA classification, and repeated non-payment. A conditional restructuring proposal, expressly revocable on continuing default, was cancelled after persistent non-compliance, so the original liability revived. Pending SARFAESI proceedings did not bar the independent remedy under the insolvency code. On these materials, the debt and default were proved, and the petition was admitted with commencement of CIRP against the corporate debtor.

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Issues: Whether the financial creditor established the existence of financial debt and default so as to justify admission of the petition and commencement of corporate insolvency resolution process.

Analysis: The record showed execution of loan documents, mortgage and guarantee arrangements, acknowledgement of debt, assignment of the debt in favour of the petitioner, classification of the account as non-performing asset, and repeated failure to service the admitted liability. The restructuring proposal was conditional and expressly liable to revocation on continuing default; the restructuring was cancelled after persistent non-compliance, with the consequence that the original liability revived. The existence of proceedings under the SARFAESI regime did not displace the independent remedy under the insolvency code. On the materials produced, the debt and default stood proved.

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

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