Proof of debt and default under the Insolvency Code leads to admission, moratorium, and commencement of CIRP.

The Tribunal found that the financial creditor proved debt and default through loan documents, renewal letter, account details and other material showing availed credit facilities and non-repayment. It held that the Section 7 application was complete, that no dispute justified rejection at the admission stage, and admitted the petition under Section 7(5) of the Insolvency and Bankruptcy Code, 2016. On admission, the Corporate Insolvency Resolution Process commenced, the statutory moratorium under Section 14 applied, and the proposed Interim Resolution Professional was appointed with directions for public announcement and further action under the Code and regulations.

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Issues: Whether the financial creditor established default and maintainability of the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 so as to admit the petition and commence the Corporate Insolvency Resolution Process.

Analysis: The application was supported by the loan documents, renewal letter, account details, and material showing that the corporate debtor had availed credit facilities and had defaulted in repayment. The Tribunal found that the debt and default stood proved, that the application was complete, and that there was no dispute warranting rejection at the admission stage. On satisfaction of default, the Tribunal proceeded to admit the application under Section 7(5) of the Insolvency and Bankruptcy Code, 2016 and held that the statutory moratorium under Section 14 would follow. The order also directed appointment of the proposed Interim Resolution Professional, public announcement, and commencement of the insolvency process in accordance with the Code and the regulations.

Conclusion: The petition was admitted, the Corporate Insolvency Resolution Process was initiated, and moratorium came into effect in favour of the petitioner.

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