Submission Of Default Record Not Compulsory For Initiating CIRP: NCLT Mumbai

The National Company Law Tribunal (NCLT), Mumbai, consisting of Shri Sameer Kakar (Member - Technical) and Shri Nilesh Sharma (Member - Judicial), passed an order and admitted the Corporate Debtor into the CIRP under section 9 of the IBC. The tribunal addressed the issue of mandatory submission of the record of default from an information utility under Regulation 20(1A) of the IBBI (Information Utilities) Regulations, 2017. The bench held that furnishing the record of the default is not mandatory even after amendment of Regulation 20 by insertion of Regulation 20 (1A) of the IBBI (Information Utilities) Regulations. Background An application seeking initiation of the CIRP was filed by the operational creditor against the corporate debtor. The applicant did the construction work for setting up the milk plant of the corporate debtor and submitted the invoices from time to time. The total amount of Rs. 11.76 Cr was due, out of which approximately only Rs. 1 Cr was paid by the corporate debtor. Therefore, as per the demand notice, the due and payable amount was Rs. 10.76 Cr. No dispute was raised by the corporate debtor with regard to the debt. The respondent prayed that it has suffered huge financial losses and therefore is facing difficulties in making the payments. NCLT's Judgement The tribunal found that the respondent has neither disputed the invoices nor disputed the amount; instead, it has admitted the outstanding amount. The tribunal observed that the operational creditor has not annexed the record of default filed with the Information Utility along with the petition. While considering the issue of non-furnishing of the record of default, the tribunal referred to the NCLAT's judgment in the case of Vijay Kumar Singhania v. Bank of Baroda and Anr. and held that furnishing the record of default is not mandatory even after amendment of Regulation 20 by insertion of Regulation 20(1A) of the IBBI (Information Utilities) Regulations, 2017 w.e.f. 14.06.2022. The bench also pointed out that the corporate debtor didn't object to the lack of record of default from the Information Utility, and the operational creditor has provided sufficient evidence of the debt default. Lastly, the tribunal observed that the default amount satisfies the threshold limit of Rs. 1 Cr, and the application is within the limitation period. Hence, the tribunal admitted the CIRP application, imposed a moratorium under Section 14, and appointed the Insolvency Resolution Professional (IRP). Case Title: Ganesh Ramkisan Rajale v. Panchtatwa Milk Industries Private Limited Case Number: C.P. (IB)/6(MB)2025 Tribunal: National Company Law Tribunal, Mumbai Judge: Shri Nilesh Sharma (Member- Judicial) and Shri Sameer Kakar (Member- Technical) For Appellant: Adv. Gaurav Nashikkar For Respondent: Adv. Omkar Kudale Date of Order: 19.03.2025 Click Here To Read/Download The Order

Submission Of Default Record Not Compulsory For Initiating CIRP: NCLT Mumbai

Mohd.Rehan Ali

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