Financial debt and default trigger Section 7 insolvency admission, with moratorium and IRP appointment following automatically.

Proof of disbursal of financial debt and occurrence of default is sufficient to satisfy Section 7 of the Insolvency and Bankruptcy Code. The materials relied on included loan and security documents, account statements, bank records, and the account's classification as non-performing, which showed that the corporate debtor had availed the facilities and failed to repay the dues. Once those requirements were met, the insolvency process had to follow, including initiation of Corporate Insolvency Resolution Process, declaration of moratorium under Section 14, and appointment of an Interim Resolution Professional.

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Issues: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was liable to be admitted on proof of financial debt and default, and whether Corporate Insolvency Resolution Process and moratorium were required to be initiated.

Analysis: The application was supported by the loan documents, security documents, account statements, bank records and classification of the account as non-performing. The materials established that the corporate debtor had availed the financial facilities, executed the relevant documents, and failed to repay the dues. On that basis, the requirements for admission under Section 7 were satisfied. Upon admission, the statutory consequences under Section 14 followed, including declaration of moratorium and appointment of an Interim Resolution Professional to take the process forward in accordance with the Code.

Conclusion: The application was admitted, Corporate Insolvency Resolution Process was initiated against the corporate debtor, moratorium was declared, and an Interim Resolution Professional was appointed.

Ratio Decidendi: Once a financial creditor establishes disbursal of financial debt and the occurrence of default, the adjudicating authority must admit the Section 7 and trigger the statutory insolvency process with the attendant moratorium.

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