Undated Certificate Of Bankers Book Evidence Act Valid Under IBC: NCLT Chandigarh

The National Company Law Tribunal (“NCLT”), Chandigarh Bench, comprising Mr. Harnam Singh Thakur (Judicial Member) and Mr. L.N. Gupta (Technical Member) has held that an undated certificate of Bankers Book Evidence Act, 1891, (“Act”) constitutes a valid certificate for regulation 2A of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (“IBBI Regulations”). Background Facts Canara Bank (“Applicant”) granted debt to Laggar Industries Limited (“Respondent”) to the tune of Rs. 23.5 crores by way of sanction of open cash credit facility, bank guarantee, and overdraft facility against bill discounting. After the dues remained unpaid, the Applicant classified the account of the Respondent as Non-Performing Asset (“NPA”) on 01 April 2018. Thereafter, the Applicant issued Default Recall Notice-cum-invocation of Guarantees calling upon the Respondent and other obligors to pay the defaulted amount. It further issued a notice to them under section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. Thereafter, the Applicant filed an application under section 7 of the Insolvency and Bankruptcy Code, 2016 (“Code”) read with rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 for initiating Corporate Insolvency Resolution Process (“CIRP”) against the Respondent. The Respondent contended the application by submitting that the statement of account was not certified by a valid certificate under the Act. It argued that the certificate attached could not be treated as a valid certificate in absence of any date mentioned on it. NCLT Verdict The NCLT noted the submissions of the Respondent with respect to the validity of an undated certificate issued under the Act and referred to the contents of the certificate submitted. Upon perusing the contents of the certificate, the NCLT rejected the contention raised by the Respondent and held that the certificate issued under the Act was duly signed and that mere omission of date would not make the certificate invalid under regulation 2A of the IBBI Regulations. In conclusion, the NCLT held that an undated certificate of Bankers Book Evidence Act, 1891 is a valid certificate for the purposes of section 7(3)(a) of the Code read with regulation 2A of the IBBI Regulations and initiated CIRP proceedings against the Respondent. Case Title: Canara Bank v. Laggar Industries Limited Case No.: CP (IB) 29/CHD/PB/2022 Counsel for the Applicant: Adv. Arora Vishwas Kumar and Adv. Abhishek Bhateja Counsel for the Respondent: Adv. Aalok Jagga and Adv. APS Madaan Click Here to Read/Download Order

Undated Certificate Of Bankers Book Evidence Act Valid Under IBC: NCLT Chandigarh

Animesh Srivastava

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Undated Certificate Of Bankers Book Evidence Act Valid Under IBC: NCLT Chandigarh

Animesh Srivastava

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