Section 7 insolvency admission follows proof of financial debt default, triggering moratorium and IRP appointment.

An application under Section 7 of the Insolvency and Bankruptcy Code was admitted after the Tribunal found the financial debt due and payable and the default established on the basis of loan documents, security creation papers, demand and possession notices, and a recovery certificate from the Debt Recovery Tribunal. The corporate debtor did not contest the proceedings despite service. The Tribunal held that the application was complete, the statutory threshold for admission was satisfied, and corporate insolvency resolution process was required to commence. Moratorium was declared and an Interim Resolution Professional was appointed to perform the statutory functions.

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Issues: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was complete and default in payment of financial debt was established so as to admit the petition and commence corporate insolvency resolution process.

Analysis: The financial creditor placed on record the loan documentation, security creation documents, demand notice, possession notice, and the recovery certificate issued by the Debt Recovery Tribunal. The corporate debtor did not contest the proceedings despite service. On the material produced, the Tribunal found that the debt was due and payable and that the corporate debtor had committed default in repayment of the financial debt. The application was found complete and the statutory threshold for admission under the insolvency framework stood satisfied. Consequentially, moratorium was required to be declared and an Interim Resolution Professional appointed to take over the statutory functions.

Conclusion: The petition was admitted, moratorium was declared, and the proposed Interim Resolution Professional was appointed.

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