Section 7 insolvency application admitted where financial debt, default, and limitation were established despite pending SARFAESI action.

A section 7 application under the Insolvency and Bankruptcy Code was found complete and maintainable because the record showed financial debt, default, and supporting loan, bank statement, and debt acknowledgement documents. The Tribunal held that default had occurred, the claim exceeded the statutory threshold, and the petition was within limitation in light of the acknowledgements relied on. It also noted that pending SARFAESI action did not bar initiation of insolvency proceedings. The application was admitted and corporate insolvency resolution process was directed to commence against the corporate debtor.

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Issues: Whether the application under section 7 of the Insolvency and Bankruptcy Code, 2016 was complete and maintainable, whether financial debt and default were established, whether the petition was within limitation, and whether the corporate insolvency resolution process should be admitted.

Analysis: The application was supported by loan documents, account statements, banker's book certificate, acknowledgements of debt, and security documents. The corporate debtor had availed the credit facilities, the debt exceeded the statutory threshold, default occurred on 30.03.2018, and the petition filed on 08.01.2021 was found to be within limitation in view of the acknowledgements relied upon. The Tribunal also noted that pendency of SARFAESI action did not bar initiation of proceedings under the Code. The petition was found complete for the purpose of initiation of corporate insolvency resolution process.

Conclusion: The section 7 application was admitted and insolvency resolution proceedings were ordered to commence against the corporate debtor.

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