Debt and default govern Section 7 admission; stamping defects in a supporting note do not defeat otherwise proved liability.

Admission under Section 7 of the Insolvency and Bankruptcy Code turns on whether debt and default are established on the evidence. The materials here, including the loan agreement, unsecured demand promissory note, audited balance-sheet disclosure, and information-utility default record, collectively proved borrowing, liability, and default. The argument that the loan was only a business loan was inconsistent with the documents. The stamping objection to the promissory note did not displace the substantive proof of debt and default, and was treated as insufficient to bar admission where liability and default were otherwise established.

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Issues: Whether the material on record established the existence of debt and default so as to justify admission of the application under Section 7 of the Insolvency and Bankruptcy Code, 2016, and whether the alleged defect in stamping of the promissory note prevented such admission.

Analysis: The record contained a loan agreement showing disbursal of Rs. 70,00,000 with interest at 15% per annum, an unsecured demand promissory note executed as security, an audit report reflecting the loan in the corporate debtor's balance sheet under non-current liabilities, and a default record authenticated by the information utility. Taken together, these materials established the borrowing, the liability, and the default. The contention that the loan was merely a business loan was found inconsistent with the loan documents. The objection based on stamping was held not to displace the substantive evidence of debt and default, and the defect, even if assumed, was treated as not overriding the claim under Section 7 where the debt and default were otherwise proved.

Conclusion: The existence of debt and default was proved, and the objection regarding stamping did not bar admission of the Section 7 application.

Ratio Decidendi: For admission under Section 7 of the Insolvency and Bankruptcy Code, 2016, the decisive inquiry is whether debt and default are established on the evidence; a stamping objection to a supporting instrument does not defeat the application where liability and default are independently proved.

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