Facts of the Case

Smart Timing Steel Limited(STSL) is an operational creditor of National Steel and Agro Industries Limited (NSAIL). A petition under Section 9 of Insolvency and Bankruptcy Code, 2016 i.e. Application for initiation of corporate insolvency resolution process by operational creditor was filed at the National Company Law Tribunal, Bombay bench.

However, copy of “the certificate from the Financial Institution maintaining account of the ‘Operational Creditor’ which shall substantiate proof of default was not produced by the appellant.

The learned Counsel contended that the appellant is a foreign company of Hong-Kong having no office or account in any scheduled bank or ‘Financial Institution’ as defined or notified under any law for the time being in force. Hence the providing a copy of the same is impossible.

The National Company Law Tribunal rejected the application.

An appeal was preferred by the appellant to the National Company Appellate Tribunal.

Legal Provision

Clause(c) of subsection (3) of Section 9 The Insolvency and Bankruptcy Code, 2016.

The operational creditor SHALL, along with the application furnish a copy of the certificate from the financial institutions maintaining accounts of the operational creditor confirming that there is no payment of an unpaid operational debt by the corporate debtor.

Question

Are the provisions stipulating list of documents required for filing an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, mandatory or directory in nature?

 

Contention of the Appellant

Subscribe to read the full Article.

Leave a Reply

0 Comments