Section 7 insolvency proof: absence of Section 65B certificate did not defeat debt and default where records were otherwise undisputed.

A section 7 insolvency application was supported by sanction letters, loan agreements and a disbursement statement, while the corporate debtor did not dispute execution, disbursement or default. Regulation 2A of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, which recognises certified copies of bankers' book entries as one mode of proving default, was inserted only from 13.11.2020 and did not apply to the filing. On that basis, the absence of a separate Section 65B certificate did not make the application incomplete, and the record was treated as sufficient to establish debt and default. The fraud allegation was left open for pursuit under Section 65 of the Insolvency and Bankruptcy Code, 2016.

---

---

Issues: Whether the section 7 application was liable to be rejected for want of a Section 65B certificate and certified copies of bankers' book entries, and whether the financial creditor had otherwise established debt and default.

Analysis: Regulation 2A of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, which specifically contemplates certified copies of bankers' book entries as one mode of proof of default, was inserted only with effect from 13.11.2020 and was not applicable when the section 7 application was filed. The application was supported by sanction letters, loan agreements, and a statement of disbursement, and the reply filed by the corporate debtor did not deny execution of the sanction letters or loan agreements, nor did it deny disbursement or default. In these circumstances, the absence of a separate Section 65B certificate did not render the application incomplete, and the evidence on record was sufficient to support admission. The plea based on fraud was also left open to be pursued under Section 65 of the Insolvency and Bankruptcy Code, 2016.

Conclusion: The challenge to admission of the section 7 application failed, and the appeal was liable to be dismissed.

---