Preamble:
Information Utility is a platform to submit information of a debtor by a creditor which acts a repository of information to substantiate the existence of debt. National E-Governance Services Limited (NeSL) (Information Utility) is India’s first and only Information Utility at present. Information Utility was incorporated as a Union Government Company.
Objective of Information Utility:
Information Utility initiative was introduced under the legal framework of Insolvency and Bankruptcy Code, 2016 (IBC). The primary ingredients to initiate Insolvency Proceedings under the IBC are existence of debt and record of default of such debt.
To facilitate and automate the process of verifying the existence of debt and confirming the record of default by the National Company Law Tribunal, the task is being entrusted to an Information Utility.
Based on the details submitted by the creditor with the Information Utility, existence of debt and record of default will be created after authentication. These records will be reviewed and relied upon by the National Company Law Tribunal at the time of hearing the Insolvency Proceeding admission application.
Submission in Information Utility:
Any person who wants to initiate Insolvency Proceeding will necessarily need to record details with an Information Utility.
A person who wants to submit financial information for the purposes of substantiating an existence of debt and record of default is required to get themselves registered with Information Utility by filling in the prescribed details, uploading the necessary documents and remitting the fees.
On successful registration, the registered person can submit financial information under the tab submission as follows:
- Type of debt to be selected i.e. Operational or Financial
- Details of the creditor (person who is submitting the financial information) will be prefilled.
- Details of the debtor to be filled in by the creditor such as Name of the Debtor, Address, Legal Constitution, PAN, Contact Person Name, Mobile Number and Email ID.
- Details of debt to be filled in by the creditor such as amount outstanding, amount overdue and other details.
- Details of security interest favouring the creditor, if any to be provided.
- Details of default to be provided on the basis of outstanding amount and amount overdue out of such outstanding.
The financial information will be submitted to the Information Utility after e-signing process and acknowledgement will be issued.
The financial detail submitted can be accessed under the subtab View Existing Loan under the tab Submission. The documents in respect of debt can be uploaded any time under the tab existing loan. The financial information can be submitted on a bulk basis as well.
The financial information submitted by the creditor will be forwarded by Information Utility to the Debtor for the purpose of verification and authentication. An electronic link of the details will be shared to the debtor which will display the details for verification and authentication. The debtor can authenticate/disagree with the information either partially or entirely through e-sign process by getting it registered with Information Utility.
The creditor will be able to monitor the status of authentication based on the response by debtor against each set of financial information submitted.
It is relevant to state at this juncture that the debtor should verify and authenticate the financial information at Information Utility within 15 days from the date of receipt. In case of no response by the debtor, Information Utility will send reminders three times, in a span of 15 days, for confirmation of information allowing three days each time for the debtor to respond.
Following are the three possible status:
| S.No. | Response | Status of Authentication | Colour of the Status |
| 1 | Debtor confirms the Financial Information | Authenticated | Green |
| 2 | Debtor disagrees the Financial Information | Disputed | Red |
| 3 | Debtor does not respond even after three reminders | Deemed to be authenticated | Yellow |
On updating the information submitted by the debtor, the status of authentication will be communicated to all the creditors of the debtor who are registered with Information Utility. Track of all the communications will be available at Information Utility.
Presently, by virtue of Reserve Bank of India Notification DBR.No.Leg.BC.98/09.08.019/2017-18 dated 19.07.2017 and DNBR.PD(ARC)CC.No.05/26.03.001/2017-18 dated 04.01.2018, all the financial creditors regulated by RBI and all Asset Reconstruction Companies shall submit financial information and information relating to security interest to the Information Utility (i.e. Information Utility).
Professional Role in Information Utility vis-à-vis clients:
Our role includes the following but not limited to:
- Information utility serves two prominent purposes i.e. registering record of contract amount/amount receivable and registering record of default in respect of registered amount. Taking into consideration of the materiality of respective clients, we can render services on registering the details of contract amount/amount receivable which will put pressure on the respective debtors. In case of ramification, record of default can be registered.
- Demand notices may be generated at Information Utility without involving legal counsel and costs thereon for recovery. The same can be presented before the appropriate forums as a valid evidence.
- To assist our clients, who have long outstanding receivables, in initiating Insolvency Proceeding.
- To assist our clients, who owe amounts to other parties, in responding to the communication received from Information Utility on details of financial information and default of debt.
- It is pertinent to note that non response to the default communication will be construed as the information deemed to be authenticated. The deemed to be authenticated information will be communicated to all the creditors registered with Information Utility, including Financial Creditors. This might lead to impacting the creditworthiness and initiation of action against the debtor.
- On registering the details of financial information of significant debtors of clients would help us to understand the status of default on a real-time basis, in case of default confirmed by any other creditor of such debtor.
- MSME Samadhaan has been integrated with Information Utility as per the direction issued by Government of India. At the time of registering a complaint on Samadhaan portal, details may be shared with Information Utility. On sharing of details, demand notice will be generated and be sent by Information Utility to the debtor on behalf of the MSME Creditor in accordance with the prescribed procedures.
- Information available at the Information Utility can be used as an external confirmation to understand default during the audit period, if any while conducting audit assignments which shall be brought to the attention of the stakeholders.
Prepared by: Gopinath P, Partner at R V K S and Associates Chartered Accountants
LinkedIn: https://www.linkedin.com/in/gopinath-p-56202316b