Section 7 insolvency admission turns on proof of debt, default, and complete application with eligible interim resolution professional

A financial creditor's Section 7 application under the Insolvency and Bankruptcy Code was held admissible where loan documents, account statements, an outstanding balance calculation, a credit report, and a balance confirmation from the corporate debtor established debt and default. The corporate debtor's request for time to settle and reference to commercial difficulties did not displace the evidence of default. The application was also found complete, and no disciplinary proceedings were pending against the proposed interim resolution professional. On satisfaction of these statutory requirements, the petition was admitted, the moratorium commenced, and the interim resolution professional was appointed.

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Issues: Whether the financial creditor had established default and completeness of the application so as to warrant admission of the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016.

Analysis: The application was supported by loan documents, account statements, a calculation of the outstanding amount, a credit information report, and a balance confirmation from the corporate debtor. The corporate debtor's reply sought time to settle and referred to commercial difficulties, but such contentions did not negate the existence of debt and default for the purpose of Section 7. The application was also found complete, and no disciplinary proceedings were pending against the proposed interim resolution professional.

Conclusion: The requirements for admission under Section 7 were satisfied, and the petition was admitted. The moratorium commenced, and the interim resolution professional was appointed.

Ratio Decidendi: Once the adjudicating authority is satisfied that a financial debt and default are established, and the application is otherwise complete, admission under Section 7 follows, subject to the statutory requirements regarding completeness and appointment of the interim resolution professional.

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