Section 7 IBC admission turns on proof of financial debt, default and a complete application, not NPA classification.

In a section 7 IBC application, the NCLT found that the financial creditor had proved financial debt and default through loan documents, sanction papers, charge records and a certified statement of accounts, which served as prima facie evidence under the Bankers' Books Evidence Act. It held that non-classification of the account as NPA was immaterial because the enquiry under section 7 is limited to debt, default and completeness of the application. As no disciplinary proceedings existed against the proposed resolution professional, the petition was admitted, the CIRP commenced, a moratorium was ordered, and the interim resolution professional was appointed.

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Issues: (i) Whether the financial creditor established default and satisfied the requirements for admission of an application under section 7 of the Insolvency and Bankruptcy Code, 2016. (ii) What consequential orders followed upon admission of the application, including appointment of the interim resolution professional and moratorium.

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

Analysis: The application was supported by loan documents, sanction letter, charge records, and a certified statement of accounts. A certified copy of entries in bankers' books was treated as prima facie evidence under section 4 of the Bankers' Books Evidence Act, 1891. The objection regarding declaration of the account as NPA was held immaterial for proceedings under section 7, since the relevant inquiry was the existence of financial debt and default. The Tribunal also found that the application was complete, the default was established, and there were no disciplinary proceedings against the proposed resolution professional.

Conclusion: The requirements for admission under section 7 were satisfied and the petition was allowed in favour of the financial creditor.

Issue (ii): What consequential orders followed upon admission of the application, including appointment of the interim resolution professional and moratorium.

Analysis: Upon admission, the Tribunal directed public announcement, appointed the proposed interim resolution professional, and ordered moratorium under section 14 of the Insolvency and Bankruptcy Code, 2016. It also directed the persons connected with the corporate debtor to extend cooperation and required deposit of expenses for the insolvency process.

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

Final Conclusion: The insolvency petition was admitted, corporate insolvency resolution process commenced against the corporate debtor, and the statutory consequences under the Code were put into operation.

Ratio Decidendi: In proceedings under section 7 of the Insolvency and Bankruptcy Code, 2016, the Adjudicating Authority is concerned only with the existence of financial debt, occurrence of default, and completeness of the application, and not with adjudication of the underlying money claim or the treatment of the account as NPA.

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