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CS Professional · Corporate Restructuring, Valuation and Insolvency · Application for Corporate Insolvency Resolution Process

Sagar Textiles Ltd receives a Section 8 demand notice from Mehta Dyes for unpaid dyes supplied. Sagar Textiles pays by NEFT within five days. Which document should it send to Mehta Dyes to establish payment under Section 8(2)?

The debtor should send an attested copy of the record of electronic transfer of the unpaid amount from its bank account. The Code alternatively accepts an attested record that the creditor encashed the debtor's cheque. Internal documents like resolutions or ledgers are not the specified proof of payment.

  1. AAn attested copy of the record of electronic transfer of the unpaid amount from its bank accountCorrect
  2. BA board resolution stating that the amount has been paid
  3. CA plain letter from its auditor stating the liability is discharged
  4. DA copy of the ledger account of Mehta Dyes in its books

Explanation

Section 8(2)(b)(i) specifies an attested copy of the record of electronic transfer from the corporate debtor's bank account. Alternatively, under (b)(ii), an attested copy of the record that the creditor encashed a cheque. Resolutions, auditor letters or own ledgers are not the prescribed proof.

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