Section 7 insolvency applications are judged by prescribed form and default, not plaint-style pleadings, if the debt is payable in law or fact.

An application by a financial creditor under Section 7 of the Insolvency and Bankruptcy Code is governed by the prescribed Form 1 and accompanying records, not by plaint-style pleading standards. The adjudicating authority may admit the application once default is shown, unless the application is incomplete. A corporate debtor can resist admission only by showing that the debt is not payable in law or in fact. On the materials in Part IV and Part V of Form 1, the application was complete and the debtor failed to establish any legal or factual bar to payment, so the admission of insolvency proceedings was upheld.

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Issues: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was liable to be rejected for alleged incompleteness and non-disclosure, and whether the admitted default could be resisted on the ground that the debt was not payable in law or in fact.

Analysis: An application by a financial creditor under Section 7 is not a plaint-like petition and is governed by the prescribed form and records under Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The statutory scheme, as explained by the Supreme Court, treats debt and claim broadly and permits the adjudicating authority to admit the application once satisfied that default has occurred, unless the application is incomplete. A corporate debtor may dispute the liability only by showing that the debt is not payable in law or in fact. On the material examined, the record in Part IV and Part V of Form 1 was sufficient and the appellants did not establish that the debt was legally or factually not payable.

Conclusion: The challenge to the admission of the Section 7 application failed and the order admitting insolvency proceedings was upheld.

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