Section 7 insolvency application turns on proof of financial debt and default; objections failed against admitted liability and records.

A section 7 application was examined on the basis of a sanctioned loan, disbursement, repayment terms and subsequent non-payment. The tribunal treated the decisive inquiry as whether a financial debt existed and whether default had occurred. The corporate debtor's objections regarding notices and related proceedings did not displace the documentary record, including admissions of inability to repay and requests for time. On that basis, the tribunal found that absence of default was not established and admitted the application, ordering commencement of corporate insolvency resolution process.

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Issues: Whether the section 7 application was maintainable and whether the existence of financial debt and default justified admission of the application and commencement of corporate insolvency resolution process.

Analysis: The application was based on a sanctioned loan under a loan agreement, and the record showed disbursement, repayment terms, and subsequent non-payment. The Corporate Debtor disputed the default and raised objections concerning contemporaneous notices and other proceedings, but the record contained admissions of inability to repay and requests for time. In a section 7 proceeding, the decisive inquiry is whether a financial debt exists and whether default has occurred. The tribunal found that the Corporate Debtor failed to establish absence of default and that the objections raised were insufficient to displace the admitted liability and documentary record.

Conclusion: The section 7 application was admitted and corporate insolvency resolution process was ordered to commence.

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