Section 7 insolvency claims: quantum disputes and older account requests do not prevent admission once debt and default are proved.

In a Section 7 insolvency application, the Tribunal held that once debt and default are established, a dispute over the exact quantum of liability does not bar admission. After loan restructuring in 2015 and execution of revised loan documents, the debtor's demand for statements from 2003 was found impermissible, and the exact liability was treated as outside the scope of Section 7 inquiry. The Tribunal found the petition complete, within limitation, and supported by proof of debt and default, and it admitted the application, ordered CIRP, and appointed an Interim Resolution Professional.

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Issues: Whether the corporate insolvency resolution process application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was maintainable and liable to be admitted on proof of debt, default and limitation, notwithstanding the corporate debtor's dispute on the quantum of the claim and request for older account statements.

Analysis: The petition was founded on restructuring of the loan facilities in 2015, execution of loan documents, and the asserted defaults reflected from 2017 and 2019. The corporate debtor's principal objection was confined to the amount claimed and alleged non-supply of full statements of account from inception. The Tribunal held that after restructuring and execution of the revised documents, insistence on accounts from 2003 was not legally permissible. It further held that adjudication of the exact quantum of liability is beyond the scope of a Section 7 inquiry. The Tribunal found that debt and default were established, that there was no serious legal objection, and that the petition was complete and within limitation.

Conclusion: The application was maintainable and was admitted. CIRP was ordered against the corporate debtor, and an Interim Resolution Professional was appointed.

Final Conclusion: The insolvency petition succeeded on proof of debt and default, and the corporate debtor's dispute over quantum did not prevent admission of the application.

Ratio Decidendi: In a Section 7 insolvency application, once debt and default are established, a dispute as to the exact quantum of liability or a demand for account statements from an earlier, pre-restructuring period does not preclude admission of the petition.

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