Admission of a Section 7 IBC Application by a Financial Creditor
An application under Section 7 of the Insolvency and Bankruptcy Code by a financial creditor requires the adjudicating authority to be satisfied that a default has occurred. The advocate must establish the existence of a financial debt and a corresponding default in payment, even if the corporate debtor disputes the precise date of default. The application must also survive a challenge on limitation, which is governed by Section 238A of the Code.
Courts approach admission by examining whether the debt and default are established from the record, and whether the application is filed within the period of limitation. The adjudicating authority's discretion is limited to determining these threshold questions and does not extend to a roving inquiry into the merits of the dispute. The listed cases, including Neeharika Infrastructure Pvt. Ltd. v. State of Maharashtra and Others and Basawaraj & Anr. v. the Spl. Land Acquisition Officer, illustrate the broader principles of judicial restraint and limitation that inform this analysis.
The leading cases
12 judgments · 12 Supreme Court · most-cited first
What LexPilot's research engine returns for this question, ranked by court and how often each judgment has been cited since. Read the full judgment before you rely on a holding.
- 1
Neeharika Infrastructure Pvt. Ltd. v. State of Maharashtra and Others
2021 INSC 253Supreme Court · 2021cited 2,233 times
Police has a statutory right and duty to investigate cognizable offences; courts must not thwart investigation save in exceptional cases. Blanket "no coercive steps" orders without reasons are impermissible and hamper…
- 2
Gurcharan Singh & Ors. v. State (delhi Administration)
1977 INSC 231Supreme Court · 1978cited 968 times
The Supreme Court upheld the High Court's order cancelling the bail granted to the appellants. The Court held that the Sessions Judge failed to give proper weight to the serious apprehension of witness tampering, a…
- 3
Mohammed Zubair v. State of Nct of Delhi & Ors
2022 INSC 736Supreme Court · 2022cited 685 times
The Court partly allowed the writ petition: (i) granted interim bail to the petitioner in all FIRs, holding that continued custody based on overlapping allegations from the same tweets had no justification; (ii)…
- 4
Basawaraj & Anr. v. the Spl. Land Acquisition Officer
2013 INSC 551Supreme Court · 2013cited 682 times
The Supreme Court dismissed the appeals, holding that the High Court was justified in dismissing the time-barred appeals. The delay of 5-1/2 years was inordinate, and the explanation of one appellant's illness did not…
- 5
N. Balakrishnan v. M. Krishnamurthy
1998 INSC 345Supreme Court · 1998cited 672 times
The Supreme Court held that the High Court erred in upsetting the trial court's order condoning the delay. The explanation for the delay was satisfactory, and the appellant's conduct did not warrant being castigated as…
- 6
Radhey Shyam & Anr. v. Chhabi Nath & Ors.
2015 INSC 160Supreme Court · 2015cited 606 times
Judicial orders of civil courts are not amenable to a writ of certiorari under Article 226 of the Constitution; control of subordinate civil courts in dealing with their judicial orders is exercised through appellate…
- 7
Kamlesh Verma v. Mayawati and Ors.
2013 INSC 526Supreme Court · 2013cited 585 times
Review proceedings under Art. 137 are not by way of appeal and must be strictly confined to Order XLVII Rule 1 CPC. The grounds on which review is maintainable are: (i) discovery of new and important matter or evidence…
- 8
Parsion Devi and Ors. v. Sumitri Devi and Ors.
1997 INSC 691Supreme Court · 1997cited 583 times
The High Court, in allowing the review petition, exceeded its jurisdiction under Order 47 Rule 1 CPC. The review petition merely challenged the correctness of the earlier order on the question of limitation without…
- 9
Union of India and Another v. Tulsiram Patel and Others
1985INSC155Supreme Court · 1985cited 568 times
The second proviso to Article 311(2) is a constitutional provision that expressly excludes the requirement of an inquiry and the principles of natural justice (audi alteram partem) when its conditions are met. Article…
- 10
Union of India & Ors. v. Tarsem Singh
2008 INSC 930Supreme Court · 2008cited 563 times
The delay of 16 years would affect the consequential claim for arrears. The Division Bench was not justified in directing payment of arrears for 16 years and granting interest. The relief relating to arrears ought to…
- 11
Indore Development Authority v. Manoharlal & Ors. etc.
2020 INSC 294Supreme Court · 2020cited 530 times
The reference was answered as follows: (1) The word "or" in s.24(2) must be read as "nor"/"and" — both conditions (possession not taken AND compensation not paid) must concur for deemed lapse; satisfaction of either…
- 12
Salonah Tea Company v. Superintendent of Taxes Nowgong & Ors. etc.
1987 INSC 383Supreme Court · 1988cited 524 times
The Supreme Court allowed the appeals. The money was refundable to the appellants. The writ petitions were within time. Where tax is collected without authority of law, the State has a concomitant duty to refund. In an…
Frequently asked questions
Can the adjudicating authority reject a Section 7 application solely because the corporate debtor disputes the date of default?
A mere dispute about the date of default does not automatically lead to rejection if the record demonstrates that a default has occurred. The adjudicating authority must ascertain the existence of a default based on the evidence filed, and a dispute on the precise date is a factual matter that does not defeat the application if the default is otherwise clear.
How does Section 238A of the IBC affect a time-barred debt in a Section 7 application?
Section 238A makes the Limitation Act applicable to proceedings under the Code. If the debt is time-barred on the date of filing, the application is not maintainable. The adjudicating authority must examine whether the limitation period for recovering the debt has expired, applying the principles laid down in cases such as Basawaraj & Anr. v. the Spl. Land Acquisition Officer regarding condonation of delay.
What is the scope of the adjudicating authority's discretion at the admission stage of a Section 7 application?
The discretion is confined to determining whether the application is complete, whether a default has occurred, and whether the application is within limitation. The authority does not adjudicate disputed questions of fact that require a full trial, and its role is to filter out applications that do not meet the statutory requirements on their face.
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