Section 7 insolvency admission turns on proof of financial debt, default, and a complete, time-barred compliant application.

A section 7 application was admitted where the financial creditor proved financial debt, default, and compliance with procedural and limitation requirements under the Insolvency and Bankruptcy Code, 2016. The Tribunal relied on loan documents, account statements, Bankers' Books Evidence Act certification, CIBIL records, security documents, and evidence of default to find that the corporate debtor had availed the facilities, the debt had crossed the threshold, and default had occurred. The objection based on NPA classification did not displace the record, and the application was treated as complete and the debt as due and payable, leading to commencement of CIRP.

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Issues: Whether the financial creditor established existence of financial debt and default so as to warrant admission of the section 7 application and commencement of corporate insolvency resolution process.

Analysis: The application was supported by loan documents, statements of account, certificate under the Bankers' Books Evidence Act, 1891, CIBIL records, security documents and evidence of default. The Tribunal found that the corporate debtor had availed the credit facilities, the debt exceeded the threshold, default had occurred on 30.09.2017, and the petition was filed within limitation. The reply disputing default on the basis of NPA classification did not persuade the Tribunal, which recorded that the application was complete and the debt was due and payable. The Tribunal also took note of the pending settlement proposal issue and disposed of the interlocutory application as recorded.

Conclusion: The section 7 application was admitted and corporate insolvency resolution process was initiated against the corporate debtor.

Ratio Decidendi: A section 7 application is liable to be admitted when the financial creditor proves the existence of financial debt, occurrence of default, and compliance with the procedural and limitation requirements under the Insolvency and Bankruptcy Code, 2016.

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