Section 7 insolvency admission turns on proved default, complete application, and a fit interim resolution professional.

Under Section 7 of the Insolvency and Bankruptcy Code, 2016, an application is admissible when default is established, the application is complete, and there is no pending disciplinary proceeding against the proposed interim resolution professional. The financial creditor supported the claim with the sanction letter, channel finance agreement, facility documents, hypothecation, guarantee, account statements and recall notices. The corporate debtor's objection that funds were not directly disbursed to it was rejected because the arrangement contemplated payment to named sellers under the channel finance structure. As the record showed a suitable IRP with consent and the default crossed the statutory threshold, the insolvency application was admitted.

---

---

Issues: Whether the financial creditor established default and satisfaction of the statutory requirements for admission of an application under Section 7 of the Insolvency and Bankruptcy Code, 2016.

Analysis: The application was supported by the sanction letter, channel finance agreement, modified facility documents, hypothecation, guarantee, account statements and recall notices. The Corporate Debtor did not dispute the existence of the facility but raised objections as to the mode of disbursement and the absence of direct payments to itself. The statutory scheme of Section 7 requires the Adjudicating Authority to be satisfied that a default has occurred, the application is complete, and no disciplinary proceeding is pending against the proposed resolution professional. The objection regarding direct disbursement was rejected because the facility contemplated payment to the named sellers under the channel finance arrangement. The record also showed a proposed IRP with consent and no pending disciplinary proceeding, and the default amount exceeded the minimum threshold.

Conclusion: The requirements for admission under Section 7 were satisfied and the insolvency application was admitted.

Ratio Decidendi: In proceedings under Section 7 of the Insolvency and Bankruptcy Code, 2016, once default is shown and the application is otherwise complete with a suitable IRP and no pending disciplinary proceeding, the Adjudicating Authority must admit the application, and disputes about the debt do not prevent admission where the debt is otherwise due and payable.

---