G.Kannan vs. The State Of Tamilnadu Rep By The Inspector Of Police (Crime), Vilakkuthoon

The learned counsel for the petitioner submitted that pursuant to the issuance of G.O.(Ms)No.282 the Revenue and Disaster Management Department Revenue Administration Wing RA-3(2) Section, dated 26.05.2026, the revenue authorities, are not issuing solvency certificates and sought the indulgence of this Code to struck off the first condition.

A careful perusal of the above said GO, would make it clear that instead of solvency, the following documents can be considered.

The current challenges observed in the existing process for the issuance of Solvency Certificate has been placed before the Empowered Committee. The Empowered Committee in its meeting on 01.04.2025 perused and considered the minutes of Screening committee on the possibilitieso f simplification of procedures in issuing Solvency Certificate as follows:- 2/6 https://www.mhc.tn.gov.in/judis (I) It was discussed that citizens faced significant challenges in obtaining a Solvency Certificate due to its one- time validity, requiring frequent reapplications whenever needed. Also the current process involves extensive documentation, difficulties in acquiring key certificates such as the Liability Amount Certificate and Mortgage Certificate and delays caused by the discretionary authority of officials, making the entire procedure complex and inconsistent. (ii) More so, it was observed that the Solvency Certificate is no longer relevant and relied upon as an indicator of financial stability or strength for the execution of projects. Actual financial stability and strength is often determined by other alternatives that ar mentioned as tender conditions and includes a combination of some of the following:- a) Income Tax Clearance Certificate b) Auditor's Certificate c) Audited Accounts certificate d) Annual turnover report e) Recent Audited Balance Sheets f) GST and VAT Clearance Certificate g) Solvency Certificate / Capability Certificate from banks h) Bank Account Statement i) Bank Guarantee 3/6 https://www.mhc.tn.gov.in/judis j) IT Returns k) Credit Line Certificate l) PAN Card m) Collateral documents that are kept for the issue of loans n) CRISIL rating and the like. (III) These alternatives have made the Solvency Certificate redundant and all institutions tend not to rely on it for financial strength and stability to execute project or for other purposes. Instead, the alternatives submitted above have become the indicator of financial strength and stability and appear to be far more reliable and binding on the parties involved. (IV) After a detailed discussion, the Committee unanimusly decided. * That the existing process for issuance of Solvency Certificate be discontinued. * That the Finance Department shall issue the necessary instructions to amend the Tamil Nadu Transparency in Tender Rules, 2000 and other prevailing orders accordingly in the light of the available currently relevant alternatives." The above documents can be utilised for determining actual financial stability and strength. 4/6 https://www.mhc.tn.gov.in/judis

In view of the above, this Criminal Revision Case is allowed by modifying the first condition of the order passed by the learned Judicial Magistrate No.1, Madurai District, in Crl.MP.No.3628 of 2025 dated 27.01.2026, directing the petitioner to produce Bank Guarantee for an amount of Rs.2,00,000/- as per the above G.O., instead of producing solvency certificate, to establish his actual financial stability. 05.08.2026 NCC : yes / no Index :yes / no pnn To 1. The Judicial Magistrate No.1, Madurai District.

The Inspector of Police (Crime), Vilakkuthoon, Police Station, Madurai District. (In Crime No.160 of 2025).

The Additional Public Prosecutor, Madurai Bench of Madras High Court, Madurai. 5/6 https://www.mhc.tn.gov.in/judis L. VICTORIA GOWRI, J pnn