Section 7 insolvency application admitted after proof of default, limitation compliance, moratorium, and appointment of interim resolution professional.

A financial creditor's Section 7 application under the Insolvency and Bankruptcy Code was treated as within limitation on the basis of the undertaking, account statements and other documentary evidence showing default. The tribunal found the application complete, noted the corporate debtor's acknowledgment of liability, verified the creditor's secured status in the debtor's records, and accepted that no disciplinary proceeding was pending against the proposed interim resolution professional. The statutory requirements for admission were therefore satisfied, leading to commencement of corporate insolvency resolution, declaration of moratorium, and appointment of the interim resolution professional to take further steps under the Code.

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Issues: (i) Whether the application was within limitation. (ii) Whether default in payment of financial debt was established and the application satisfied the requirements for admission under the Insolvency and Bankruptcy Code, including appointment of an interim resolution professional and declaration of moratorium.

Issue (i): Whether the application was within limitation.

Analysis: The record showed evidence of default through the undertaking, account statements and other documentary material placed on record. On that basis, the petition was treated as having been filed within limitation.

Conclusion: The issue was decided in favour of the petitioner.

Issue (ii): Whether default in payment of financial debt was established and the application satisfied the requirements for admission under the Insolvency and Bankruptcy Code, including appointment of an interim resolution professional and declaration of moratorium.

Analysis: The application was found complete in the prescribed form, the respondent acknowledged inability to pay the liability, the petitioner's name appeared in the corporate debtor's records as a secured creditor, and no disciplinary proceeding was pending against the proposed resolution professional. The statutory conditions for admission under Section 7 were therefore held to be satisfied. Upon admission, moratorium followed and the interim resolution professional was appointed to take steps for collation of claims and constitution of the Committee of Creditors.

Conclusion: The issue was decided in favour of the petitioner.

Final Conclusion: The petition was admitted, the corporate insolvency resolution process commenced, moratorium was declared, and the interim resolution professional was appointed to proceed in accordance with the Code.

Ratio Decidendi: Where a financial creditor establishes a complete application, occurrence of default, and compliance with the statutory prerequisites, the adjudicating authority must admit the petition and trigger moratorium and insolvency resolution proceedings.

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