Debt and default under insolvency law: NeSL records and absence of account reconciliation can justify petition admission and affect limitation.

Examines whether outstanding debt and default, evidenced by ledger entries and NeSL records and unchallenged by reconciliation or statement of account, justify admission of an insolvency petition; holds that established debt and default mandate admission of the petition. Addresses limitation by treating the recorded date of default in loan records and NeSL as the trigger for the limitation period, concluding the filing was within time. Operative legal points: evidentiary weight of NeSL records and debtor's failure to produce reconciliatory account, and use of recorded date of default for limitation assessment.

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Issues: (i) Whether there is debt and default within the meaning of the Insolvency and Bankruptcy Code, 2016 such as to warrant admission of the Section 7 petition; (ii) Whether the Section 7 application was barred by limitation.

Issue (i): Whether there is debt and default within the meaning of the Insolvency and Bankruptcy Code, 2016 such as to warrant admission of the Section 7 petition.

Analysis: The Adjudicating Authority found outstanding debt exceeding the statutory threshold and relied on NeSL record showing default. Multiple OTS proposals by the corporate debtor, including one after admission, were noted as evidencing default. No reconciliation or statement of account was produced by the corporate debtor to controvert the claim. The Adjudicating Authority applied the principle that once outstanding debt and default are established, admission under Section 7 follows.

Conclusion: The Section 7 petition was rightly admitted on the ground that debt and default as contemplated by the Insolvency and Bankruptcy Code, 2016 were established.

Issue (ii): Whether the Section 7 application was barred by limitation.

Analysis: The date of default recorded in the application and NeSL was 08.06.2023. The Section 7 application filed on 15.01.2025 was held to be within the prescribed limitation period based on the date of default as recorded in the loan and NeSL records. The Adjudicating Authority's conclusion on limitation was accepted.

Conclusion: The Section 7 application was not barred by limitation.

Final Conclusion: The impugned admission order under Section 7 of the Insolvency and Bankruptcy Code, 2016 is upheld and the appeal is dismissed.

Ratio Decidendi: Where the Adjudicating Authority is satisfied that an outstanding debt exists and a default has occurred, admission of a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 is required.

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