TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Join Channel
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether a financial creditor, even as a member of a consortium, can maintain an application individually under Section 7 of the Insolvency and Bankruptcy Code, 2016. (ii) Whether the applicant established the existence of debt and default so as to justify admission of the petition and commencement of corporate insolvency resolution process.
Issue (i): Whether a financial creditor, even as a member of a consortium, can maintain an application individually under Section 7 of the Insolvency and Bankruptcy Code, 2016.
Analysis: Section 7(1) permits a financial creditor to file an application either by itself or jointly with other financial creditors. The provision does not impose a general bar against a single lender invoking the insolvency process merely because other lenders are also part of a consortium. The objection to individual maintainability was therefore examined against the statutory text and rejected.
Conclusion: The issue was decided in favour of the petitioner. An individual financial creditor in a consortium can maintain a Section 7 application.
Issue (ii): Whether the applicant established the existence of debt and default so as to justify admission of the petition and commencement of corporate insolvency resolution process.
Analysis: The record showed admission of the borrowing and liability, including acknowledgment of outstanding dues, and also reflected steps taken for recovery, including classification of the account as NPA and issuance of demand notice under the security enforcement regime. On this material, the Tribunal found the debt to be enforceable and the default to be established. The requirements for admission under Section 7 were therefore satisfied.
Conclusion: The issue was decided in favour of the petitioner. Debt and default were proved, and the petition was admitted for commencement of corporate insolvency resolution process.
Final Conclusion: The application under Section 7 was admitted, moratorium was ordered, and an interim resolution professional was appointed for the corporate debtor.
Ratio Decidendi: A financial creditor may independently invoke Section 7 even where it is one of several consortium lenders, and once debt and default are established on the record, admission of the insolvency petition follows.
TaxTMI 
