Requirement of Bank Certificate for making application by Operational Creditor
January 15, 2019 by Ridhima Chachra
Section 9(3)(c) of the Code requires the Operational Creditor to submit, if available, a copy of certificate from the financial institution maintaining accounts of the operational creditor confirming that there is no payment of an unpaid operational debt by the corporate debtor.
This requirement though important is not mandatory for triggering application by operational creditor.
The Supreme Court vide its order in the matter of Macquarie Bank Vs Shilpi Cable Technologies enabled foreign operational creditors to move an application under the Code as the foreign creditors may not be holding a bank account in the country. The term ‘confirming’ used in the statute makes it clear that the certificate from financial institution is an important piece of evidence but not mandatory and non-payment of unpaid operational debt may be established through other documents as well.
Hence, IBC has widened its scope for recovery by not limiting operational creditors to residents of India and those happening to bank with financial institution mention in section 3(14) of the Code, rather enabling foreign residents as well to take recourse under the Code even in the absence of certificate from the financial institution.The requirement of Bank Certificate under this section is only directive rather than compulsory in relation to an operational debt.