# In the matter of Macquarie Bank Limited Vs. Shilpi Cable Technologies Ltd. Civil Appeal no. 15135-2017

> SC judgment dated 2017-12-15. Citation: TCN-2017-SC-00001. The appeals concern two important questions arising under the Insolvency and Bankruptcy Code, 2016…

- **Court:** SC
- **Order date:** 15 Dec 2017
- **Citation:** TCN-2017-SC-00001
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/macquarie-bank-limited-vs-shilpi-cable-technologies-ltd-civil-appeal-no-15135-20-9fdd3ff7

## Summary

### Background

The appeals concern two important questions arising under the Insolvency and Bankruptcy Code, 2016 (IBC). The first question is whether Section 9(3)(c) of the IBC, regarding the provision of a certificate from a financial institution confirming non-payment of an operational debt, is mandatory for operational debt claims. The second question is whether a demand notice for an unpaid operational debt can be issued by a lawyer on behalf of the operational creditor. The appellant, Macquarie Bank Limited, had entered into an agreement with Hamera International Private Limited, acquiring the original supplier's rights in a supply agreement with the respondent, Shilpi Cable Technologies Ltd. Disputes arose regarding payment for goods supplied, leading to the appellant issuing

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## Facts

Hamera International Private Limited executed an agreement with Macquarie Bank Limited, Singapore, on 2015-07-27, by which the appellant purchased the original supplier's right, title and interest in a supply agreement in favor of the respondent, Shilpi Cable Technologies Ltd. The respondent entered into an agreement dated 2015-12-02 for supply of goods worth US$6,321,337.11 in accordance with the terms and conditions contained in the said sales contract. The supplier issued two invoices dated 2015-12-21 and 2015-12-31. Payment terms under the said invoices were 150 days from the date of bill of ladings dated 2015-12-17/2015-12-19. Since amounts under the said bills of lading were due for payment, the appellant sent an email dated 2016-05-03 to the contesting

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## Issues and analysis

### Issue 1: Whether, in relation to an operational debt, the provision contained in Section 9(3)(c) of the Code …

**Ratio:** Section 9(3)(c) of the IBC is directory in nature, not mandatory. This means that the

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**Reasoning:** The Court reasoned that a strict interpretation of Section 9(3)(c) would lead to absurd

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**Interpretation:** The Court interpreted Section 9(3)(c) in light of the legislative intent behind

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**Application:** The Court applied its reasoning to the facts of the case, noting that the

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## Parties

- **Judges:** ROHINTON FALI…
- **Appellants:** MACQUARIE BANK…
- **Respondents:** Shilpi Cable…
- **Other parties:** Over Tu…

## Timeline

- **2015-07-27 — Agreement between…**: Hamera International Private Limited executed an agreement with Macquarie Bank Limited,…
- **2015-12-02 — Agreement between…**: The respondent entered into an agreement for…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9(3) — Application for initiation of corporate…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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