Information Utilities and Their Evidentiary Value in IBC Proceedings

Vikrant D. Shetty

Oct 11

11 min read

Information Utilities and Their Evidentiary Value in IBC Proceedings

A record of default issued by a registered Information Utility such as the National E-Governance Services Limited is admissible in evidence before the National Company Law Tribunal under Section 215 of the Insolvency and Bankruptcy Code, 2016, and Section 215(2) creates a rebuttable presumption that the recorded information is accurate. The presumption is not conclusive: a corporate debtor may rebut it with affirmative evidence, though a bare denial is not enough. Information Utilities function under Sections 209 to 216 of the Code, and the IBC (Amendment) Bill, 2025 proposes mandatory pre-filing submission for operational creditors too. This article sets out the architecture and the procedure for authentication and rebuttal.

The Statutory Architecture: Sections 209 to 216 of the IBC

The IBC establishes Information Utilities as regulated entities registered with the Insolvency and Bankruptcy Board of India (IBBI). Their core function, defined in Section 209, is to accept, store, authenticate, and deliver financial information submitted by creditors and debtors. Section 210 obligates financial creditors to submit financial information to the IU in the prescribed form and within the prescribed time.

Section 215 is the operative provision on evidence. It provides that financial information maintained by an IU is admissible in evidence in any proceeding before the NCLT and in any court. Critically, Section 215(2) creates a rebuttable presumption: any information maintained by an IU is presumed to be accurate until the contrary is proved. This shifts the evidentiary burden to the party challenging the record. National E-Governance Services Ltd. (NeSL), incorporated in 2016, is presently the only registered IU in India.

The IBC (Amendment) Bill, 2025: Operational Creditors and Mandatory Pre-Filing Submission

The IBC (Amendment) Bill, 2025 significantly expands the IU framework. Under the proposed amendments, operational creditors must submit financial information to an IU before filing a Section 9 application. The corporate debtor is then required to authenticate or dispute that information within a prescribed window; silence is treated as deemed authentication. This change aims to front-load the evidentiary process, reduce frivolous Section 9 applications, and give the NCLT a cleaner record of default at the admission stage.

For financial creditors, the 2025 amendments tighten the existing framework by mandating submission of loan agreements, security documentation, and repayment schedules to the IU, not merely the default event. The intent is to move toward a system where the IU record comprehensively captures the entire credit relationship, making it easier to establish both the existence of a debt and the fact of default in a single authenticated document.

What Does an Information Utility's Record of Default Actually Prove?

A record of default issued by NeSL is powerful evidence of default but it is not conclusive on all elements of a Section 7 or Section 9 application. The NCLT must still be satisfied that a financial debt exists and that a default has occurred, two separate elements, each with its own evidentiary requirements. The record of default directly addresses the second element (the fact of default on a specific date), while the existence of a financial debt must be established through the underlying documentation: loan agreements, security documents, facility letters, or account statements.

Where a corporate debtor disputes the record of default, the Section 215(2) presumption requires the debtor to produce evidence rebutting the IU record. This is a higher threshold than a mere denial. The debtor must provide affirmative evidence, typically bank statements, board resolutions, or correspondence showing the account was not in default on the claimed date. NCLT benches have consistently held that bald denials unsupported by documentary evidence are insufficient to rebut the presumption.

Is the NeSL Record Mandatory? The Directory vs. Mandatory Debate

A question that arose frequently in early IBC litigation was whether a financial creditor was required to produce a record of default from the IU, or whether alternative evidence was sufficient. The IBBI's position, reflected in the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 and in Form 1 (the Section 7 application form), is that a record of default from the IU is one acceptable mode of proving default, not the exclusive mode. A creditor may alternatively produce a certificate of default from the banker, a certified copy of entries in bankers' books under the Bankers' Books Evidence Act, 1891, or a court order confirming the debt.

However, NCLT benches have increasingly expressed a preference for IU records where available, viewing them as carrying greater evidentiary weight than unilateral bank statements or creditor-generated documents. The practical advice for creditors is to obtain and file a NeSL record of default wherever possible, supplemented by underlying documentation, rather than relying solely on bank certificates.

Authentication and Data Submission: Procedural Requirements

To obtain a record of default, the financial creditor must first submit the financial information, including the loan agreement, repayment schedule, and security details, to NeSL. NeSL notifies the corporate debtor, who then has an opportunity to authenticate or dispute the information. Once authenticated (or deemed authenticated after the prescribed window), the information becomes an authenticated record. The record of default is then issued when the creditor reports a default event and NeSL verifies it against the authenticated financial information.

The NeSL submission process involves a digital identification requirement: both creditor and debtor must be registered entities with valid digital signatures or equivalent authentication credentials. Disputes raised during the authentication window are recorded on the system and form part of the IU record, meaning that a corporate debtor that raised objections during authentication but was unsuccessful cannot easily resile from that position before the NCLT.

Comparative Evidentiary Modes for Establishing Default

The following table compares the main evidentiary instruments available to a financial creditor when filing under Section 7 of the IBC:

How Has the Supreme Court Described the Role of Information Utilities?

Information utilities are a distinctive feature of India's insolvency architecture, and their role was noted by the Supreme Court in Swiss Ribbons (P) Ltd. v. Union of India [(2019) 4 SCC 17], which upheld the Code and described the institutional structure it created, including the information utilities that store financial information and records of default. An information utility, of which the National E-Governance Services Limited is the principal example, collects, authenticates, and stores financial information supplied by creditors and debtors, so that the existence of a debt and a default can be established from a reliable, independent record rather than from contested private documents. The Court's recognition of this structure underlines that information utilities are an integral part of the Code's design.

The Record of Default as Evidence

The practical value of an information utility lies in the evidential weight of its records. When a creditor files financial information about a debt and a default, the utility serves notice on the debtor and gives it an opportunity to confirm or dispute the information, and a record that is authenticated in this way carries strong evidentiary value of the existence of the debt and the default. In an application to initiate insolvency, such a record can go a long way towards satisfying the adjudicating authority that a default has occurred, reducing the scope for a debtor to raise unmeritorious disputes about the basic facts. This is precisely the function the information-utility system was designed to serve: to make the proof of default quicker and more reliable.

How Is a Default Established and Rebutted Under the IBC?

Although an authenticated record is powerful, it is not conclusive for all purposes, and a debtor retains the ability to dispute the debt or the default on legitimate grounds, so the record shifts the practical burden rather than foreclosing the enquiry. Where the debtor has been given the opportunity to respond and has not genuinely disputed the information, the record stands as strong proof; where the debtor raises a real dispute, the adjudicating authority still examines the matter. For creditors, the lesson is to file financial information with an information utility as a matter of course, so that when a default occurs the record already exists; for debtors, the lesson is to engage with the authentication process rather than ignoring it, because silence strengthens the record against them.

Frequently Asked Questions

Is a NeSL record of default mandatory for filing a Section 7 application?

It is not mandatory. A financial creditor may produce other admissible evidence of default, such as a certificate from the bank, certified entries in bankers' books, or relevant court orders. However, an IU record carries a statutory presumption of accuracy under Section 215(2) of the IBC, making it the strongest single evidentiary instrument for establishing default.

Can a corporate debtor dispute the NeSL record at the NCLT?

Yes. The presumption under Section 215(2) is rebuttable. A corporate debtor that disputes the default must produce affirmative documentary evidence, not merely a denial, to overcome the presumption. Bald assertions have consistently been rejected by NCLT benches. If the debtor raised objections during the authentication process at NeSL, that record will also be before the NCLT.

What information must a creditor submit to NeSL?

The financial creditor must submit information relating to the financial contract (loan agreement, facility letter, or security document), the repayment schedule, and the details of any default. NeSL maintains this information, notifies the corporate debtor, and issues a record of default once the creditor reports a default event. The 2025 IBC Amendment Bill proposes to extend mandatory submission requirements to operational creditors as well.

How does the 2025 IBC Amendment Bill change the IU framework?

The 2025 Amendment Bill proposes that operational creditors must submit financial information to an IU before filing a Section 9 application. Corporate debtors must authenticate or dispute that information within the prescribed window; silence is treated as deemed authentication. For financial creditors, the amendments tighten existing submission requirements, moving toward a more comprehensive authenticated record covering the full credit relationship.

What happens if NeSL records are incomplete or incorrect?

If the NeSL record contains incomplete or incorrect information, due to submission errors or disputes at the authentication stage, the creditor can apply to NeSL for correction. If correction is refused, the dispute may be escalated to the IBBI. At the NCLT, the creditor can lead supplementary documentary evidence to fill gaps in the IU record. The court retains jurisdiction to evaluate the totality of evidence presented.

Does a NeSL record of default create any rights for the creditor outside NCLT proceedings?

Section 215 confines the admissibility provision to proceedings before the NCLT and courts. A NeSL record does not by itself constitute a money decree or create a charge over the debtor's assets. Its utility lies exclusively in the evidentiary domain, establishing default to initiate CIRP or to support claims in related proceedings such as Section 19 cooperation applications or Section 66 fraudulent trading matters.

What is the National E-Governance Services Limited and is it the only registered Information Utility in India?

The National E-Governance Services Limited, known as NeSL, was the first Information Utility registered with the Insolvency and Bankruptcy Board of India under the Insolvency and Bankruptcy Board of India (Information Utilities) Regulations, 2017, and it remained the dominant Information Utility in practice for several years. The framework under Sections 209 to 216 of the Insolvency and Bankruptcy Code, 2016 permits the IBBI to register more than one Information Utility, and additional entities have since sought or obtained registration, though NeSL's records account for the large majority of records relied upon in NCLT filings.

What fee does a creditor pay to submit financial information to an Information Utility?

An Information Utility registered under the Insolvency and Bankruptcy Board of India (Information Utilities) Regulations, 2017 charges a prescribed fee for accepting and authenticating financial information, and the fee schedule is published by the Information Utility itself subject to IBBI oversight. The fee is generally modest relative to the value of the debt being recorded, and it is paid by the creditor submitting the information, though the cost of obtaining a certified record of default for use in a Section 7 filing is a separate, smaller charge from the authentication fee itself.

How long does the authentication process take once a creditor submits financial information to NeSL?

Once a creditor submits financial information to NeSL, the corporate debtor is given a notice period under the Insolvency and Bankruptcy Board of India (Information Utilities) Regulations, 2017 to authenticate or dispute the information, typically running to a matter of days before the record is treated as authenticated in the absence of a response. If the debtor disputes the information within the window, the dispute is recorded alongside the submission rather than resolved by NeSL itself, leaving the underlying disagreement for the National Company Law Tribunal to determine when the record is later relied upon.

What happens if a corporate debtor simply does not respond to the authentication notice from an Information Utility?

A corporate debtor's silence during the authentication window under the Insolvency and Bankruptcy Board of India (Information Utilities) Regulations, 2017 results in the submitted financial information being treated as authenticated by default, which strengthens the Section 215(2) presumption of accuracy available to the creditor in a later Section 7 filing. A debtor that later wishes to contest the debt cannot simply point to its earlier silence as neutral; it must produce affirmative evidence to rebut the presumption, making early engagement with an authentication notice considerably safer than ignoring it.

Is a record from an Information Utility the same as a credit information report from a credit bureau such as CIBIL?

A record from an Information Utility registered under Sections 209 to 216 of the Insolvency and Bankruptcy Code, 2016 is a distinct instrument from a credit information report issued by a credit information company such as CIBIL, which is regulated under the Credit Information Companies (Regulation) Act, 2005 for a different purpose, principally credit risk assessment. An Information Utility record carries a specific evidentiary status and rebuttable presumption under Section 215 of the IBC for use in insolvency proceedings, a status a CIBIL report does not independently carry before the National Company Law Tribunal.

Are Information Utility records admissible in arbitration proceedings as well as before the NCLT?

Section 215 of the Insolvency and Bankruptcy Code, 2016 makes an Information Utility's record admissible in evidence in any proceeding before the National Company Law Tribunal and in any court, and this wording is broad enough to extend to other judicial proceedings where the record is relevant, though its use in a private arbitration would additionally depend on the arbitral tribunal's own rules of evidence and the parties' arbitration agreement, since Section 215 does not specifically address arbitral proceedings by name.

Can a creditor rely on an Information Utility record to establish default in a Section 9 application by an operational creditor before the 2025 amendments take effect?

Before the IBC (Amendment) Bill, 2025 makes Information Utility submission mandatory for operational creditors, an operational creditor filing a Section 9 application can still voluntarily obtain and rely on an Information Utility record of default to support the claim, since Section 215 of the Insolvency and Bankruptcy Code, 2016 is not restricted to financial creditors, but the current framework does not compel operational creditors to use an Information Utility, unlike the mandatory position for financial creditors filing under Section 7.

What penalty applies if a creditor submits false financial information to an Information Utility?

A person who submits false or misleading financial information to an Information Utility can face penal consequences under the Insolvency and Bankruptcy Code, 2016 and the regulations governing Information Utilities, including action by the Insolvency and Bankruptcy Board of India against the submitting entity, in addition to the practical consequence that a court is unlikely to extend the Section 215(2) presumption of accuracy to information shown to have been submitted falsely, which can undermine the creditor's underlying Section 7 or Section 9 application itself.