IBC section 7 admission upheld where debt, default and limitation were established; one-time settlement could not be compelled.

An application under section 7 of the Insolvency and Bankruptcy Code was found maintainable where the Corporate Debtor had admitted liability and default in its reply and settlement correspondence, and where acknowledgments in financial statements supported a subsisting debt within limitation. On that basis, the petition was admitted and corporate insolvency resolution process was ordered, with appointment of an Interim Resolution Professional. The Bench also stated that it had no power to direct the Financial Creditor to accept the Corporate Debtor's one-time settlement proposal, so that request was rejected.

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Issues: Whether the application under section 7 of the Insolvency and Bankruptcy Code, 2016 was maintainable and liable to be admitted on proof of financial debt, default and limitation, and whether the Corporate Debtor's request for one time settlement could prevent admission.

Analysis: The Corporate Debtor admitted the liability and the default in its reply and in several letters seeking consideration of its settlement proposal. The record also showed acknowledgments of debt in the Corporate Debtor's financial statements and correspondence, supporting the existence of a subsisting debt and default within limitation. In such a situation, the Bench held that there was no basis to refuse admission of the petition. It further held that it had no power to direct the Financial Creditor to accept the one time settlement proposal. The petition also satisfied the other statutory requirements for admission, including appointment of an Interim Resolution Professional.

Conclusion: The application under section 7 was admitted and corporate insolvency resolution process was ordered against the Corporate Debtor; the request to compel acceptance of the one time settlement was rejected.

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