Section 7 insolvency admission upheld where debt, default and completeness were established; Section 10A did not apply.

A Section 7 application under the Insolvency and Bankruptcy Code was admitted where financial debt, default and a complete application were established, and the proposed interim resolution professional had filed the requisite declaration. The assignee was permitted to substitute for the original financial creditor on the basis of the deed of assignment, and the proposed interim resolution professional was also substituted. Section 10A did not bar the petition because the default occurred before 25 March 2020 and the petition predated the suspension period. The corporate insolvency resolution process was commenced, the moratorium followed, and the proposed interim resolution professional was confirmed.

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Issues: (i) Whether the financial creditor could be substituted in place of the original applicant and the proposed interim resolution professional could be substituted; (ii) Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was complete and disclosed financial debt and default warranting admission; (iii) Whether the suspension under Section 10A of the Insolvency and Bankruptcy Code, 2016 applied to the default in question.

Issue (i): Whether the financial creditor could be substituted in place of the original applicant and the proposed interim resolution professional could be substituted.

Analysis: The petition recorded an assignment of the debt in favour of the assignee by deed of assignment, with the assignee stepping into the shoes of the original financial creditor. The proposed change in the interim resolution professional was also supported by the changed circumstances and the filing of the required declaration by the proposed professional. No objection was filed by the corporate debtor to the substitution requests.

Conclusion: The substitution of the financial creditor and the substitution of the interim resolution professional were allowed.

Issue (ii): Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was complete and disclosed financial debt and default warranting admission.

Analysis: The decision applied the settled requirement that a Section 7 applicant must establish the existence of a financial debt, default, and a complete application proposing a resolution professional with no pending disciplinary proceedings. On the record, the debt and default were found established, the application was treated as complete, and the proposed interim resolution professional had filed the requisite declaration. The petition was held to be within limitation.

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

Issue (iii): Whether the suspension under Section 10A of the Insolvency and Bankruptcy Code, 2016 applied to the default in question.

Analysis: The default was found to have occurred before 25 March 2020, and the petition predated the statutory suspension. The carve-out in Section 10A was therefore not attracted to the facts of the case.

Conclusion: Section 10A did not apply to bar the petition.

Final Conclusion: The insolvency petition was allowed, the corporate insolvency resolution process was commenced, the moratorium under Section 14 followed, and the proposed interim resolution professional was confirmed.

Ratio Decidendi: A Section 7 application must be admitted once the adjudicating authority is satisfied that financial debt and default are established and the application is otherwise complete, and the post-25 March 2020 suspension under Section 10A does not apply to defaults occurring before that date.

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