Financial debt and default established, leading to admission of the insolvency petition, CIRP initiation, and statutory moratorium.

Proof of financial debt and default under the Insolvency and Bankruptcy Code, 2016 justified admission of the section 7 application. Balance-sheet entries and other material showed unsecured loans advanced by the financial creditor and remained unpaid despite opportunities to repay, so the statutory requirements for commencement of CIRP were met. The Tribunal therefore admitted the petition, initiated insolvency proceedings against the corporate debtor, and imposed the statutory moratorium under section 14. The interim resolution professional was directed to perform the functions under the Code.

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Issues: Whether the application under section 7 of the Insolvency and Bankruptcy Code, 2016 was maintainable and deserved admission on proof of financial debt and default, and whether CIRP and moratorium were to be initiated.

Analysis: The application was supported by balance-sheet entries and other material showing unsecured loans advanced by the financial creditor to the corporate debtor, with repayment remaining unpaid despite opportunities afforded to the corporate debtor. The Tribunal found that the existence of financial debt and default had been established. On that basis, the statutory conditions for admission of a section 7 application were satisfied, warranting commencement of CIRP and imposition of moratorium under the Code. The proposed interim resolution professional had already been confirmed by the Tribunal.

Conclusion: The section 7 petition was admitted, CIRP was initiated against the corporate debtor, moratorium under section 14 was imposed, and the interim resolution professional was directed to perform the functions contemplated under sections 15, 17 and 18 of the Code.

Final Conclusion: The application succeeded on merits, resulting in commencement of insolvency proceedings against the respondent and the consequential statutory moratorium.

Ratio Decidendi: Proof of financial debt and default under section 7 of the Insolvency and Bankruptcy Code, 2016 is sufficient for admission of the petition and initiation of CIRP, with the statutory moratorium following as a consequence.

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