Limitation and proof of default govern Section 7 insolvency applications; absence of prescribed records defeats admission.

An application under Section 7 of the Insolvency and Bankruptcy Code, 2016 failed because the debt was not shown to be within limitation and default was not proved by the prescribed record. The claim originated from a 1997 loan arrangement, the first admitted default was in 1999, and the material did not show a legally sustainable live claim through the later acknowledgment and settlement deed or up to the demand notice in 2021. The applicant also did not produce an information utility record, certified banker's book entry, or adjudicatory order evidencing non-payment. On these facts, commencement of CIRP was not warranted.

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Issues: (i) Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation. (ii) Whether the applicant had established default through the prescribed documentary record.

Issue (i): Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation.

Analysis: The loan arrangement arose from 1997 and the first default, on the applicant's own showing, occurred in 1999. Even treating the later admission of liability as an acknowledgment, there was no material showing continuity of the claim after 13.09.2002 till the settlement deed of 28.07.2014, and a further long gap existed thereafter until the demand notice in 2021. The record did not establish a legally sustainable live claim within limitation.

Conclusion: The application was barred by limitation and this issue was decided against the applicant.

Issue (ii): Whether the applicant had established default through the prescribed documentary record.

Analysis: The applicant did not file a record of default from an information utility, nor a certified banker's book entry, nor an adjudicatory order evidencing non-payment as contemplated by the governing insolvency framework. In the absence of such material, default and debt were not proved to the standard required for admission of the application.

Conclusion: Default was not established in the manner required and this issue was decided against the applicant.

Final Conclusion: The insolvency application failed on both limitation and proof of default, and no ground was made out for commencement of CIRP.

Ratio Decidendi: An application under Section 7 of the Insolvency and Bankruptcy Code, 2016 must disclose a debt and default within limitation and be supported by the prescribed documentary proof; absent these requirements, admission cannot be granted.

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