Case Title: Ganesh Ramkisan Rajale v. Panchtatwa Milk Industries Private Limited
Facts of the Case
An application under Section 9 of the Insolvency and Bankruptcy Code, 2016 was filed by the operational creditor, Ganesh Ramkisan Rajale, against Panchtatwa Milk Industries Pvt. Ltd. The operational creditor had executed construction work for setting up a milk plant and raised invoices from time to time. While the total payable amount was ₹11.76 crore, only about ₹1 crore had been paid, leaving a balance of ₹10.76 crore. A demand notice was served, and notably, the corporate debtor did not raise any dispute regaSrding the debt or the invoices. Instead, it admitted financial distress and inability to pay.
Tribunal’s Decision
The NCLT Mumbai Bench observed that although the operational creditor had not submitted a record of default from an Information Utility (IU) with the petition, the absence of such a record does not invalidate the application. Relying on the NCLAT’s decision in Vijay Kumar Singhania v. Bank of Baroda, the tribunal held that filing a record of default with an IU is not mandatory, even after the introduction of Regulation 20(1A) of the IBBI (Information Utilities) Regulations, 2017, with effect from 14.06.2022.
The tribunal noted that:
- The corporate debtor did not dispute the debt.
- Sufficient documentary evidence (invoices, demand notice, etc.) was submitted by the creditor.
- The claim amount crossed the ₹1 crore threshold and the petition was within the limitation period.
Accordingly, the application was admitted, a moratorium under Section 14 was imposed, and an Interim Resolution Professional (IRP) was appointed.
Our Comments
This ruling clarifies a growing area of debate regarding the procedural compliance under Section 9 post the 2022 amendment to the IBBI (IU) Regulations. While Regulation 20(1A) encourages the use of Information Utilities to streamline insolvency filings, NCLT Mumbai has reaffirmed that the absence of an IU record does not make an application defective or non-maintainable, especially where the debt is clearly evidenced and undisputed.
This approach is pragmatic. Operational creditors — unlike financial institutions — may not always have access to IU mechanisms or may find it procedurally cumbersome, particularly in small and medium enterprises (SME) contexts. The tribunal’s emphasis on substantive compliance over mere procedural formality is in line with the IBC’s objective of ensuring resolution over technical dismissal.
Furthermore, the ruling affirms that where no dispute exists and adequate evidence of default is presented, the absence of IU filing cannot be used as a defense by the corporate debtor, especially when not even objected to during proceedings.
In essence, this decision strengthens the operational creditor’s position and ensures that technicalities do not override the merits of a genuine claim under the Code.
For a deeper dive into IBC and its evolving jurisprudence, check out our guide here: https://rdlawchambers.com/comprehensive-guide-on-insolvency-and-bankruptcy-code-and-nclt-proceedings/