Content Provider | Supreme Court of India |
---|---|
e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | ss.8 and 9 Adjudicatory Authority Rules Harmonious Construction Insolvency and Bankruptcy |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Allowed |
Headnote | Insolvency and Bankntptcy Code, 2016:s.9(3)(c) - Provision in relation to operational debt, containedin s.9(3)(c) of the Code if mandatory or directory - Held: Sub-clause (c) of s.9(3) makes it clear that a copy of the certificate fromthe financial institution maintaining accounts of the operationalcreditor confirming that .there is no payment of an unpaid operationaldebt by the corporate debtor is certainly not a condition precedentto trigger the insolvency process under the code - The expression"confirming" makes it clear that this is on~y a piece of evidence,albeit a very important piece of evidence, which only "confirms"that there is no payment of an unpaid operational debt - Thisbecomes clearer when one goes to sub-clause (d) of s.9(3) whichrequires such other information as may be specified has also to befurnished along with the application - Read with the Code, theAdjudicatory Authority Rules form a self-contained code beingcontemporanea expositio by the Executive which is charged withcarrying out the provisions of the Code - The tnie constntction ofs. 9(3)(c) is that it is a procedural provision, which is directory innature, as the Adjudicatory Authority Rules read with the Codeclearly demonstrate - The Insolvency and Bankntptcy (Applicationto Adjudicating Authority) Rules, 2016 - r. 6 and Form 5 - Doctrines/Principles - Principle of Contemporanea expositio.ss.8 and 9 - Demand notice of an unpaid operational debtissued by a lawyer on behalf of the operational creditor - Proprietyof - Held: Proper - s.8 of the Code speaks of an operational creditor Gdelivering a demand notice -Intention of Legislature was not torestrict such demand notite being sent by the operational creditorhimself. otherwise the expression used would perhaps have been"issued" and not "delivered" - Delivery, therefore, would postulatethat such notice could be made by an authorized agent - Further,Form of demand notice and Form of application by operationalcreditor to initiate corporate insolvency resolution process, i.e.Forms 3 and 5 require such authorized agent to state his "positionwith" or "in relation" to the operational creditor - Expression "inrelation to" is a very wide expression, which specifically includes aposition which is outside or indirectly related to the operationalcreditor - Both expressions "authorize to act" and "position inrelation to the operational creditor" go to show that an authorizedagent or a lawyer acting on behalf of his client is included withinthe aforesaid expression - Further, a conjoint reading of s.30 of the Advocates Act and ss.8, and 9 of the Code together withAdjudicatory Authority Rules and Forms thereunder would yieldresult that a notice sent on behalf of the operational creditor by alawyer would be in order - Advocates Act, 1961 - s.30 -Interpretation of Statutes - Harmonious Construction - TheInsolvency and Bankruptcy (Application to Adjudicating Authority)Rules, 2016 - Forms 3 and 5. |
Judge | Hon'ble Mr. Justice R.F. Nariman |
Neutral Citation | 2017 INSC 1241 |
Petitioner | Macquarie Bank Limited |
Respondent | Shilpi Cable Technologies Ltd. |
SCR | [2017] 13 S.C.R. 751 |
Judgement Date | 2017-12-15 |
Case Number | 15135 |
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