The Supreme Court held that pending or informal restructuring negotiations do not prevent admission of a Section 7 IBC application when financial debt and default are established in accordance with the Debenture Trust Deed.

The Supreme Court reaffirmed that admission of a Section 7 insolvency application is mandatory once financial debt and default are established, and courts cannot examine the Corporate Debtor’s viability or settlement proposals rejected by the Committee of Creditors.

Once default of the Corporate Debtor is finally adjudicated under Section 7 IBC, personal guarantors cannot reopen the issue to resist proceedings under Section 95 of the Code.

The NCLAT held that violation of deposit provisions under the Companies Act does not render an interest-bearing loan unenforceable or bar insolvency proceedings under Section 7 of the IBC.

The Supreme Court clarified that a joint Section 7 application by real estate allottees is maintainable when the statutory threshold is satisfied at the time of valid filing and default is established due to non-delivery of lawful possession.