The central legal point established in the judgment is the process for a financial creditor to trigger the insolvency resolution process under Section 7 of the Insolvency and Bankruptcy Code, 2016, emphasizing the definition of 'default' and 'debt' and the authority's role in admitting or rejecting the application based on the satisfaction of a default.

ORDER :

1. The appellant – ‘financial creditor’ filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (for short, the ‘I&B Code’) on 12th March, 2018 before the Adjudicating Authority (National Company Law Tribunal), Kolkata Bench, Kolkata but without hearing the Adjudicating Authority adjourned the appeal number of times for one or other reason such as filing reply or filing of rejoinder. Till date no final order has been passed though more than 10 months have passed. In view of non-disposal of application under Section 7, the appeal has been preferred by ‘Financial Creditor’ against the order of adjournment, which has been adjourned for 16th January, 2019.

2. It has come to our notice that the ‘corporate debtor’ is from the state of ‘Odisha’ and the matter may be transferred to ‘National Company Law Tribunal’, Cuttack Bench which is likely to be opened on 22nd January, 2019. Therefore, we are of the view that order under Section 7 required to be passed before the case is transferred and thereby prolongs.

3. It is needless to say that if there is a ‘debt’ and ‘default’ and the record is otherwise complete, the application is to be admitted. On the other hand, if there is no ‘debt’ payable in law or in fact then it is to be rejected. In that view of the matter we are not passing any specific directions, as the matter will be taken up on 16th January, 2019 we expect that the Adjudicating Authority (National Company Law Tribunal), Kolkata will pass appropriate order either admitting or rejecting the application under Section 7 of the I&B Code taking into the consideration of the decision of the Hon’ble Supreme in ‘M/s. Innoventive Industries Ltd. Vs. ICICI Bank Ltd. – (2018) 1 SCC 407’, wherein Hon’ble Supreme Court observed as follows:

“27. The scheme of the Code is to ensure that when a default takes place, in the sense that a debt becomes due and is not paid, the insolvency resolution process begins. Default is defined in Section 3(12) in very wide terms as meaning non-payment of a debt once it becomes due and payable, which includes non-payment of even part thereof or an instalment amount. For the meaning of “debt”, we have to go to Section 3(11), which in turn tells us that a debt means a liability of obligation in respect of a “claim” and for the meaning of “claim”, we have to go back to Section 3(6) which defines “claim” to mean a right to payment even if it is disputed. The Code gets triggered the moment default is of rupees one lakh or more (Section 4). The corporate insolvency resolution process may be triggered by the corporate debtor itself or a financial creditor or operational creditor. A distinction is made by the Code between debts owed to financial creditors and operational creditors. A financial creditor has been defined under Section 5(7) as a person to whom a financial debt is owed and a financial debt is defined in Section 5(8) to mean a debt which is disbursed against consideration for the time value of money. As opposed to this, an operational creditor means a person to whom an operational debt is owed and an operational debt under Section 5(21) means a claim in respect of provision of goods or services.

28. When it comes to a financial creditor triggering the process, Section 7 becomes relevant. Under the explanation to Section 7(1), a default is in respect of a financial debt owed to any financial creditor of the corporate debtor – it need not be a debt owed to the applicant financial creditor. Under Section 7(2), an application is to be made under sub-section (1) in such form and manner as is prescribed, which takes us to the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. Under Rule 4, the application is made by a financial creditor in Form 1 accompanied by documents and records required therein. Form 1 is a detailed form in 5 parts, which requires particulars of the applicant in Part I, particulars of the corporate debtor in Part II, particulars of