2017 (1) TMI 1417 - Tri - Insolvency and Bankruptcy

Corporate insolvency process - non filing certificate from the Financial Institution maintaining Accounts of the Operational Creditor confirming that there is no payment of this unpaid operational Debt by the Corporate Debtor as set out in (c) of Subsection (2) of Section (9) of this Code 2016 - Held that - On perusal of Section 9 of Insolvency and Bankruptcy Code, it is evident, that it is mandatory to file copy of the Certificate from the Financial Institutions reflecting non-payment of the operational debt impugned, for the Operation Creditor has failed to annex copy of the said Certificate as required u/s 9(3)(c) of the code, this petition is liable to be rejected.

Summary

Issues: Failure to file certificate from Financial Institution confirming unpaid operational debt as required under Section 9(3)(c) of the Insolvency and Bankruptcy Code.

Analysis:
The judgment by the National Company Law Tribunal, Mumbai, involved the rejection of a Creditor Petition filed under Section 9 of the Insolvency and Bankruptcy Code due to the failure of the operational creditor to provide a certificate from the Financial Institution confirming the non-payment of the operational debt by the Corporate Debtor, as mandated by Section 9(3)(c) of the Code. The Tribunal noted that despite being given time to furnish the required document, the petitioner's counsel failed to provide the necessary certificate. The counsel argued that it was impossible to obtain the certificate as the bank of the operational creditor was situated outside India, requesting an exemption from this requirement.

Upon examining the provisions of Section 9 of the Insolvency and Bankruptcy Code, the Tribunal emphasized the mandatory nature of filing the certificate from the Financial Institution to demonstrate the non-payment of the operational debt in question. Since the operational creditor failed to annex a copy of the required certificate as per Section 9(3)(c) of the Code, the Tribunal concluded that the petition was deficient and therefore liable to be rejected. Consequently, the Tribunal issued an order rejecting the petition due to the non-compliance with the statutory requirement of providing the certificate from the Financial Institution confirming the unpaid operational debt, as stipulated under Section 9(3)(c) of the Insolvency and Bankruptcy Code.