IBC Section 209: No person to function as information utility without certificate of registration

Section 209 of Insolvency and Bankruptcy Code, 2016: No person to function as information utility without certificate of registration

Official Bare Act Text

Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment Limitation Monetary

Save as otherwise provided in this Code, no person shall carry on its business as information utility under this Code without a certificate of registration issued in that behalf by the Board.

Legal Commentary & Landmark Judgments: Section 209

Section 209 prohibits any person from functioning as an Information Utility (IU) without obtaining a valid certificate of registration from the Board.

Mandatory Statutory Registration: No entity can carry on business or function as an information utility without a certificate of registration granted by the IBBI.
Institutional Role: Information utilities act as specialized digital repositories for storing, verifying, and authenticating electronic records of debt, security interests, and defaults.
Prohibition Against Unauthorised Depository: Operating an uncertified financial information repository purporting to issue statutory default certificates under the Code is illegal.

Key Landmark Precedents:

Swiss Ribbons Pvt. Ltd. v. Union of India (2019) 4 SCC 17: The Supreme Court delivered a landmark ruling highlighting that registered Information Utilities under Section 209 are crucial digital pillars that eliminate factual disputes regarding debt and default.
Innoventive Industries Ltd. v. ICICI Bank (2018) 1 SCC 407: Observed that Information Utilities registered under the Code provide authentic, unassailable evidence of default to speed up insolvency admissions.

Courtroom Practice & Strategic Litigation Guidance:

Financial institutions must ensure that default data is submitted exclusively to IBBI-registered Information Utilities (such as NeSL) to qualify for statutory presumptions under Section 7 and Section 9.