Section 7 insolvency filing may proceed through an authorised officer, and default can be proved without an information utility certificate.
A financial creditor may file a section 7 insolvency application through a duly authorised officer acting under power of attorney and letter of authority. The absence of an information utility certificate does not defeat admission where other records and evidence sufficiently establish debt and default. Where the corporate debtor does not dispute the financial debt or the default, the statutory conditions for commencement of corporate insolvency resolution proceedings are satisfied, enabling admission of the petition, declaration of moratorium, public announcement, and appointment of the proposed interim resolution professional.
Issues: (i) whether the financial creditor's section 7 application was maintainable when filed through an officer authorised by power of attorney and letter of authority; (ii) whether production of a certificate of default from an information utility was mandatory for admission; and (iii) whether the admitted financial debt and default warranted admission of the corporate insolvency resolution process and consequential moratorium.
Issue (i): whether the financial creditor's section 7 application was maintainable when filed through an officer authorised by power of attorney and letter of authority.
Analysis: The application was signed and verified by the Assistant General Manager on the basis of a prior power of attorney and a later letter of authority. The record showed that the financial creditor itself had approached the Adjudicating Authority through its officer. The objection that the officer was not competent merely because the power of attorney pre-dated the insolvency code was rejected. The reasoning accepted that a delegated officer of the bank could validly act for the financial creditor for filing proceedings under the insolvency code.
Conclusion: The application was held to be validly authorised and maintainable.
Issue (ii): whether production of a certificate of default from an information utility was mandatory for admission.
Analysis: The statutory scheme permits the financial creditor to file records of default recorded with an information utility or other records and evidence of default. The absence of an information utility certificate did not defeat the application where the creditor produced ample material establishing the debt and the default. The objection was therefore treated as unsustainable.
Conclusion: Production of an information utility certificate was held not to be mandatory in the circumstances.
Issue (iii): whether the admitted financial debt and default warranted admission of the corporate insolvency resolution process and consequential moratorium.
Analysis: The corporate debtor did not dispute the existence of financial debt or the occurrence of default. Once those foundational facts stood admitted and supported by the record, the statutory conditions for commencement of corporate insolvency resolution process were satisfied. The Adjudicating Authority therefore admitted the petition, declared moratorium, directed public announcement, and appointed the proposed interim resolution professional.
Conclusion: The section 7 petition was admitted and the corporate insolvency resolution process was initiated.
Final Conclusion: The decision upholds commencement of insolvency proceedings against the corporate debtor on the basis of admitted debt and default, while rejecting the objections to authorisation and to the absence of an information-utility certificate.
Ratio Decidendi: For admission under section 7 of the Insolvency and Bankruptcy Code, 2016, admitted financial debt and default are sufficient, and a financial creditor may act through a duly authorised officer while supporting the application with evidence of default other than an information-utility certificate.
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