NCLAT has ruled that unregistered defaults with an Information Utility do not preclude the admission of Section 7 applications under the Insolvency and Bankruptcy Code, based on valid loan documents.
NCLAT Rules on Information Utility Default Registration
The National Company Law Appellate Tribunal (NCLAT) has determined that the absence of default registration with an Information Utility does not inhibit the admission of Section 7 applications under the Insolvency and Bankruptcy Code (IBC). The tribunal held that valid loan documents and acknowledgments of Out-of-Court Settlements (OTS) could substantiate the application.
This determination underscores that claim verification is possible based on documented evidence rather than the registration status with an Information Utility. The ruling clarifies the requirements for initiating insolvency proceedings and signals a flexible approach to default acknowledgment.
Legal representatives in insolvency matters should be aware of this ruling, which can streamline the admission process in Section 7 applications and reduce dependence on Information Utility registrations in future cases.
Citations
- NCLAT Delhi (2026)
