Financial debt and default established; Section 7 insolvency petition held maintainable despite limitation objection

A financial creditor established financial debt and default through loan records, successive assignment agreements and evidence of continued non-payment by the corporate debtor. In assessing limitation, the Tribunal took into account the bona fide pursuit of claims before the DRT and other forums, treating the time spent in those proceedings as relevant. It also found the Section 7 petition complete and noted that no disciplinary proceeding was pending against the proposed interim resolution professional. The petition was held maintainable, the limitation objection was rejected, and insolvency proceedings were directed to commence against the corporate debtor.

---

---

Issues: Whether the financial creditor established the existence of financial debt and default and whether the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation.

Analysis: The financial creditor produced documentary material showing advancement of loans, assignment of the debt through successive assignment agreements, and persistent non-payment by the corporate debtor. The pending and concluded proceedings before the DRT and other forums were relied upon to show that the claim was being pursued bona fide, and the period spent in those proceedings was taken into account while examining limitation. The Tribunal accepted that the debt and default stood established, that the petition was complete, and that no disciplinary proceeding was pending against the proposed interim resolution professional.

Conclusion: The petition under Section 7 was held maintainable and was admitted. The limitation objection was not accepted, and the insolvency process was directed to commence against the corporate debtor.

---