The Hon’ble Supreme Court has, through the present decision, effectively allowed foreign operational creditors to expeditiously file an application and possibly recover their unpaid dues without getting hampered by onerous procedural necessities or getting entangled in protracted civil litigation.
In the instant case titled Macquire Bank Limited v. Shilpi Cable Technologies issues that were raised before the Supreme Court for clarification were:
Whether Section 9(3)(c) of the Code is mandatory or directory in nature, especially in the context of foreign operational creditors.
Whether a demand notice of an unpaid operational debt under Section 8(1) can be issued by a lawyer on behalf of an operational creditor.
With regard to the first issue, Supreme Court held that a lawyer on behalf of the operational creditor can issue a demand notice of the unpaid operational debt and observed as follows: "A conjoint reading of Section 30 of the Advocates Act and Sections 8 and 9 of the Code together with the Adjudicatory Authority Rules and Forms thereunder would yield the result that a notice sent on behalf of an operational creditor by a lawyer would be in order“
With regard to the second issue, the Apex court held that the provision contained in Section 9(3)(c) of the IBC is not mandatory for initiating an insolvency proceeding. The court stated that:
“It is true that the expression “initiation” contained in the marginal note to Section 9 does indicate the drift of the provision, but from such drift, to build an argument that the expression “initiation” would lead to the conclusion that Section 9(3) contains mandatory conditions precedent before which the Code can be triggered is a long shot. Equally, the expression “shall” in Section 9(3) does not take us much further when it is clear that Section 9(3)(c) becomes impossible of compliance in cases like the present. It would amount to a situation wherein serious general inconvenience would be caused to innocent persons, such as the appellant, without very much furthering the object of the Act.”
Further, it was held by the court that prohibiting the Advocates from practicing in the Tribunal will affect Article 19 of the constitution which gives freedom to practice the profession.
The Hon'ble Supreme Court while maintaining a positive attitude toward the Code has construed its provisions in a way that makes it more inclusive, accessible, and far-reaching, contributing to the Code's accessibility and effectiveness.