The Supreme Court of India delivered a definitive verdict streamlining corporate insolvency proceedings, ruling that adjudicating authorities must rely primarily on authenticated records of default when evaluating financial debt applications.

Evidentiary Value of Information Utility Records

A Bench of the Supreme Court examined the operational thresholds required for admitting insolvency petitions under Section 7 of the IBC.

Key Observations and Legal Principles

  • Conclusive Proof of Default: The Court reiterated that an official record of default from a registered Information Utility constitutes robust and sufficient evidence to establish default, eliminating the need for exhaustive forensic accounting or reconciliation by the adjudicating authority.
  • Profitability is Irrelevant to Default: The Bench firmly ruled that a company being profitable or financially sound on paper is no answer or legal defense against an established debt default under the Code.

The Supreme Court accordingly dismissed the challenge, upholding the admission of the insolvency petition.