In Brief
Macquarie Bank Limited, a foreign bank, sought to initiate insolvency against a corporate debtor for non-payment of an operational debt under the Insolvency and Bankruptcy Code, 2016. The NCLAT rejected the application on two grounds: (i) absence of a certificate from a financial institution as required by Section 9(3)(c), and (ii) the demand notice was issued by a lawyer rather than the creditor itself. The Supreme Court held that Section 9(3)(c)'s certificate requirement is directory, not mandatory, as the Code permits proof of default through other documentary evidence. The Court also ruled that a lawyer may issue a demand notice and conduct insolvency proceedings on behalf of an operational creditor, as the word 'delivered' denotes agency, and lawyers have wide authority to represent clients under the Advocates Act. The appeals were allowed.
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