Financial debt and admitted default justified admission of the section 7 insolvency petition and commencement of CIRP.

A section 7 Insolvency and Bankruptcy Code application was held maintainable where a sanctioned loan, repeated non-payment of interest, and recall of the facility established financial debt and default. The date of default disclosed in Part IV of Form I kept the petition within limitation, and the corporate debtor's financial distress did not negate the admitted debt. The application was also found complete, the default exceeded the statutory threshold, and the proposed interim resolution professional had filed the required consent and registration details. On that basis, the petition was admitted and CIRP against the corporate debtor was commenced.

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Issues: Whether the petition under section 7 of the Insolvency and Bankruptcy Code, 2016 was maintainable and admissible on proof of financial debt and default, including limitation and completeness of the petition.

Analysis: The petition was founded on a sanctioned loan disbursed to the corporate debtor, its subsequent default in payment of interest, and the recall of the facility after repeated demands. The date of default shown in Part IV of Form I brought the petition within limitation. The corporate debtor's principal defence was inability to pay because of financial distress, but the debt itself stood repeatedly admitted. The petition was found complete in all respects, the default exceeded the statutory threshold, and the proposed interim resolution professional had furnished the required written communication and registration particulars.

Conclusion: The petition under section 7 was admitted and initiation of the corporate insolvency resolution process against the corporate debtor was ordered.

Ratio Decidendi: Where the existence of financial debt and default is established, the petition is complete, and the claim is within limitation, the Adjudicating Authority must admit the section 7 application and commence CIRP.

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