The Chandigarh Bench of the National Company Law Tribunal ( NCLT ) held that Undated Certificate of the Bankers Book Evidence Act, 1891 is valid under the Insolvency and Bankruptcy Code, 2016 ( IBC ).
Canara Bank (“Applicant”) has filed the present application under Section 7 of the Insolvency and Bankruptcy Code, 2016 read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 with a prayer to initiate the Corporate Insolvency process against Laggar Industries Limited (“Respondent”).
The Applicant has claimed an outstanding “financial debt” of Rs.19,81,34,726.85 and stated that the Account of the Respondent Company was classified as NPA on 01.04.2018. It has relied on the date of NPA i.e., 01.04.2018 as the date of default. It is further submitted by the Applicant Bank that on 03.07.2018, it issued the Default Recall Notice-cum-invocation of Guarantees calling upon the CD and other obligors to pay the defaulted amount, and thereafter, on 03.08.2018 issued notice under Section 13(2) of SARFESI Act.
The Applicant has relied on various documents to prove the existence of debt and default as mentioned in paragraph 6 of this order. During the hearing, in support of its contentions, the Ld. Counsel for the Applicant referred to the Applicant Bank’s sanction letters, Loan Recall Notice-cum-invocation of Guarantees dated 03.07.2018 issued on behalf of the Applicant Bank, and notice issued under Section 13(2) SARFESI dated 03.08.2018 and possession notice under section 13(4) dated 13.11.2018.
The Respondent in its defence has contended that the present application does not disclose correct date of default as it has to be prior to 31.12.2017. Further, the application is time barred as it has been filed on 29.12.2021, whereas date of default according to Bank is 01.04.2018. Furthermore, the statement of account filed with the application is not certified by certificate of Bankers Book Evidence Act, 1891.
A Two-Member Bench comprising LN Gupta, Technical Member and Harnam Singh Thakur, Judicial Member observed that “On perusal of the Certificate under the Bankers Book Evidence Act, 1891 (ibid), we observe that the certificate under the Bankers Book Evidence Act, 1891 is duly signed and mere omission of date would not make the certificate invalid. Hence, we do not find merit in this contention of the Respondent.”
“In the sequel to the above and the given facts and circumstances, the present Application being complete and the Applicant having established the default on the part of the Respondent in payment of the Financial Debt for an amount being above the minimum threshold limit, the present Application is admitted in terms of Section 7(5) of the IBC and accordingly, the Moratorium is declared in terms of Section 14 of the Code” the Tribunal noted.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
