Section 7 insolvency admission follows proof of default, a complete application, and statutory consequences including moratorium and CIRP.

A financial creditor may obtain admission under Section 7 of the Insolvency and Bankruptcy Code, 2016 where loan documents, account statements, acknowledgment of debt, and other material establish a due and unpaid financial debt, default, and a complete application. On the stated facts, the account was classified as non-performing and the outstanding liability remained unpaid, satisfying the definitions of debt and default under Sections 3(11) and 3(12). The Tribunal therefore admitted the petition, commenced the corporate insolvency resolution process, declared moratorium, and appointed the proposed interim resolution professional, with public announcement and claims process to follow.

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Issues: (i) Whether the financial creditor established default and satisfied the requirements for admission of the application under Section 7 of the Insolvency and Bankruptcy Code, 2016. (ii) Whether the corporate insolvency resolution process, moratorium, and appointment of an interim resolution professional were warranted.

Issue (i): Whether the financial creditor established default and satisfied the requirements for admission of the application under Section 7 of the Insolvency and Bankruptcy Code, 2016.

Analysis: The application was supported by loan documents, account statements, acknowledgment of debt, and material showing that the corporate debtor had failed to service the debt when due. The record showed that the account had been classified as a non-performing asset and that the outstanding liability remained unpaid. The statutory framework under Section 7 permits admission where default has occurred and the application is complete. The definitions of debt and default under Sections 3(11) and 3(12) were found to be satisfied on the material placed before the Tribunal.

Conclusion: The default was proved and the application was found complete, justifying admission under Section 7.

Issue (ii): Whether the corporate insolvency resolution process, moratorium, and appointment of an interim resolution professional were warranted.

Analysis: Once default was established, the statutory consequences under the insolvency framework followed. The Tribunal proceeded to commence the corporate insolvency resolution process, declare moratorium, appoint the proposed interim resolution professional, and direct the steps contemplated by the Code, including public announcement, claims process, and protection of the corporate debtor as a going concern.

Conclusion: The corporate insolvency resolution process was commenced, moratorium was declared, and the interim resolution professional was appointed.

Final Conclusion: The petition was admitted and insolvency proceedings were set in motion against the corporate debtor under the Code.

Ratio Decidendi: Where a financial creditor substantiates a due and unpaid financial debt with evidence of default and the application is otherwise complete, admission under Section 7 follows and the statutory consequences of commencement of corporate insolvency resolution process and moratorium ensue.

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