TMI Blog2017 (12) TMI 850X X X X Extracts X X X X X X X X Extracts X X X X ..... ad together. Also, we must not forget that Section 30 of the Advocates Act deals with the fundamental right under Article 19(1)(g) of the Constitution to practice one s profession. Therefore, 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. - CIVIL APPEAL NO.15135 OF 2017, CIVIL APPEAL NO.15481 OF 2017 AND CIVIL APPEAL NO.15447 OF 2017 - - - Dated:- 15-12-2017 - Mr. R.F. Nariman And Mr. Navin Sinha JJ. JUDGMENT R.F. Nariman, J. 1. The present appeals raise two important questions which arise under the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the Code ). The first question is whether, in relation to an operational debt, the provision contained in Section 9(3)(c) of the Code is mandatory; and secondly, whether a demand notice of an unpaid operational debt can be issued by a lawyer on behalf of the operational creditor. 2. The facts contained in the three appeals are similar. For the purpose of this judgment, the facts containe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 of the Companies Act, 1956 and that, therefore, under Section 9(5)(ii) (d), the application would have to be dismissed. 4. By the impugned judgment dated 17.7.2017, the NCLAT agreed with the NCLT holding that the application would have to be dismissed for non compliance of the mandatory provision contained in Section 9(3)(c) of the Code. It further went on to hold that an advocate/lawyer cannot issue a notice under Section 8 on behalf of the operational creditor in the following terms: In the present case, as the notice has been given by an advocate/lawyer and there is nothing on the record to suggest that the lawyer was authorized by the appellant, and as there is nothing on the record to suggest that the said lawyer/ advocate hold any position with or in relation to the appellant company, we hold that the notice issued by the advocate/ lawyer on behalf of the appellant cannot be treated as notice under Section 8 of the I B Code . And for the said reason also the petition under Section 9 at the instance of the appellant against the respondent was not maintainable. 5. Shri Mukul Rohatgi, learned senior advocate appearing on behalf of the appellant, referred us to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... senior advocate, supported the arguments of Shri Rohatgi and went on to add that the definition of person contained in Section 2(23) of the Code includes a person resident outside India, and when read with the definition of operational creditor in Section 5(20) of the Code would make it clear that persons, such as the appellant, are certainly operational creditors within the meaning of the Code. He stressed the fact that if a copy of the certificate under Section 9(3)(c) can only be from a financial institution as defined under Section 3(14) of the Code, and if a non resident bank or financial institution, such as the appellant, may not be included either as a scheduled bank under Section 3(14)(a) or as such other institution as the Central Government may by notification specify as a financial institution under Section 3(14) (d), it is clear that Section 9(3)(c) cannot operate to non suit the appellant, as it would be impossible to get a certificate from a financial institution as defined. This being the case, he argued that the Court should add words into the expression financial institution , as it would otherwise lead to absurdity and that if Section 9(3)(c) is held to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it must be done in that manner or not at all. He also referred us to various Sections of the Code, the Insolvency and the Adjudicating Authority Rules, Form 5 in particular, together with the Viswanathan Committee and report Joint Committee report of the Parliament. According to the learned senior counsel, it is clear from the definition of financial institution contained in Section 3(14) that certain foreign banks are included within the expression scheduled banks under Section 3(14)(a) and that, under Section 3(14)(d), the Central Government may, by notification, specify other foreign banks as financial institutions. It is only where operational creditors have dealings with banks which fall within Section 3(14), that they can avail the opportunity of declaring a corporate debtor as insolvent under Sections 8 and 9 of the Code. Persons who may be residents outside India and who bank with entities that are not contained within the definition of Section 3 (14) would, therefore, be outside the Code. 8. According to the learned senior counsel, the consequence of not furnishing a copy of the certificate under Section 9(3)(c) is that, under Section 9(5)(ii)(a), the application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inancial institution as defined in clause (72) of section 2 of the Companies Act, 2013; and (d) such other institution as the Central Government may by notification specify as a financial institution; (23) person includes- (a) an individual; (b) a Hindu Undivided Family; (c) a company; (d) a trust; (e) a partnership; (f) a limited liability partnership; and (g) any other entity established under a statute, and includes a person resident outside India; (25) person resident outside India means a person other than a person resident in India; xxx xxx xxx 5. In this Part, unless the context otherwise requires,- (20) operational creditor means a person to whom an operational debt is owed and includes any person to whom such debt has been legally assigned or transferred; (21) operational debt means a claim in respect of the provision of goods or services including employment or a debt in respect of the repayment of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority; xxx xxx xxx 8. Insolvency resolution by operational ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing that there is no payment of an unpaid operational debt by the corporate debtor; and (d) such other information as may be specified. (4) An operational creditor initiating a corporate insolvency resolution process under this section, may propose a resolution professional to act as an interim resolution professional. (5) The Adjudicating Authority shall, within fourteen days of the receipt of the application under sub-section (2), by an order- (i) admit the application and communicate such decision to the operational creditor and the corporate debtor if,- (a) the application made under sub-section (2) is complete; (b) there is no repayment of the unpaid operational debt; (c) the invoice or notice for payment to the corporate debtor has been delivered by the operational creditor; (d) no notice of dispute has been received by the operational creditor or there is no record of dispute in the information utility; and (e) there is no disciplinary proceeding pending against any resolution professional proposed under sub-section (4), if any. (ii) reject the application and communicate such decision to the operational creditor and the corporate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority, by registered post or speed post to the registered office of the corporate debtor. FORM 3 (See clause (a) of sub-rule (1) of rule 5) FORM OF DEMAND NOTICE / INVOICE DEMANDING PAYMENT UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (Under rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016) [Date] To, [Name and address of the registered office of the corporate debtor] From, [Name and address of the registered office of the operational creditor] Subject: Demand notice/invoice demanding payment in respect of unpaid operational debt due from [corporate debtor] under the Code . Madam/Sir, 1. This letter is a demand notice/invoice demanding payment of an unpaid operational debt due from [name of corporate debtor]. 2. Please find particulars of the unpaid operational debt below: PARTICULARS OF OPERATIONAL DEBT 1. TOTAL AMOUNT OF DEBT, DETAILS OF TRANSACTIONS ON ACCOUNT OF WHICH DEBT FELL DUE, AND THE DATE FROM WHICH SUCH DEBT FELL DUE 2. AMOUNT CLA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of person authorised to act on behalf of the operational creditor Name in block letters Position with or in relation to the operational creditor Address of person signing Instructions 1. Please serve a copy of this form on the corporate debtor, ten days in advance of filing an application under section 9 of the Code. 2. Please append a copy of such served notice to the application made by the operational creditor to the Adjudicating Authority. Form 5 (See sub-rule (1) of rule 6) APPLICATION BY OPERATIONAL CREDITOR TO INITIATE CORPORATE INSOLVENCY RESOLUTION PROCESS UNDER THE CODE. (Under rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016) [Date] To, The National Company Law Tribunal [Address] From, [Name and address for correspondence of the operational creditor] In the matter of [name of the corporate debtor] Subject: Application to initiate corporate insolvency resolution process in respect of [name of the corporate debtor] under the Insolvency and Bankruptcy Code ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... N ACCOUNT OF WHICH DEBT FELL DUE, AND THE DATE FROM WHICH SUCH DEBT FELL DUE 2. AMOUNT CLAIMED TO BE IN DEFAULT AND THE DATE ON WHICH THE DEFAULT OCCURRED (ATTACH THE WORKINGS FOR COMPUTATION OF AMOUNT AND DATES OF DEFAULT IN TABULAR FORM) Part-V PARTICULARS OF OPERATIONAL DEBT [DOCUMENTS, RECORDS AND EVIDENCE OF DEFAULT] 1. PARTICULARS OF SECURITY HELD, IF ANY, THE DATE OF ITS CREATION, ITS ESTIMATED VALUE AS PER THE CREDITOR. ATTACH A COPY OF A CERTIFICATE OF REGISTRATION OF CHARGE ISSUED BY THE REGISTRAR OF COMPANIES (IF THE CORPORATE DEBTOR IS A COMPANY) 2. DETAILS OF RESERVATION / RETENTION OF TITLE ARRANGEMENTS (IF ANY) IN RESPECT OF GOODS TO WHICH THE OPERATIONAL DEBT REFERS 3. PARTICULARS OF AN ORDER OF A COURT, TRIBUNAL OR ARBITRAL PANEL ADJUDICATING ON THE DEFAULT, IF ANY (ATTACH A COPY OF THE ORDER) 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the application in accordance with the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. Annex V Written communication by the proposed interim resolution professional as set out in Form 2 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. [WHERE APPLICABLE] Annex VI Proof that the specified application fee has been paid. Note : Where workmen/employees are operational creditors, the application may be made either in an individual capacity or in a joint capacity by one of them who is duly authorised for the purpose. 11. The first thing to be noticed on a conjoint reading of Sections 8 and 9 of the Code, as explained in Mobilox Innovations Private Limited v. Kirusa Software Private Limited , Civil Appeal No. 9405 of 2017 decided on 21.9.2017, at paragraphs 33 to 36, is that Section 9(1) contains the conditions precedent for triggering the Code insofar as an operational creditor is concerned. The requisite elements necessary to trigger the Code are: i. occurrence of a default; ii. delivery of a demand notice of an unpaid operational debt or invoice demanding payment of the amount involved; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h other information as may be specified has also to be furnished along with the application. 15. When Form 5 under Rule 6 is perused, it becomes clear that Part V thereof speaks of particulars of the operational debt. There are 8 entries in Part V dealing with documents, records and evidence of default. Item 7 of Part V is only one of such documents and has to be read along with Item 8, which speaks of other documents in order to prove the existence of an operational debt and the amount in default. Further, annexure III in the Form also speaks of copies of relevant accounts kept by banks/financial institutions maintaining accounts of the operational creditor, confirming that there is no payment of the unpaid operational debt, only if available . This would show that such accounts are not a pre-condition to trigger the Code, and that if such accounts are not available, a certificate based on such accounts cannot be given, if Section 9 is to be read the Adjudicating Authority Rules and the Forms therein, all of which set out the statutory conditions necessary to invoke the Code. 16. In State of U.P. v. Babu Ram 1961 2 SCR 679 at 701-702, this Court dealt with the position ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LR 43 Cal 790 : AIR 1916 Cal 136] has been stated by Mukerjee, J., thus: It is a well settled principle of interpretation that courts in construing a statute will give much weight to the interpretation put upon it, at the time of its enactment and since, by those whose duty it has been to construe, execute and apply it. I do not suggest for a moment that such interpretation has by any means a controlling effect upon the Courts; such interpretation may, if occasion arises, have to be disregarded for cogent and persuasive reasons, and in a clear case of error, a court would without hesitation refuse to follow such construction. However, Dr. Singhvi referred to the following three judgments for the proposition that rules cannot override the substantive provisions of an Act: D.T.U. v. B.B.L. Hajelay (1972) 2 SCC 744 (para 13); ADM (Rev.) Delhi Admn. v. Siri Ram (2000) 5 SCC 451 (para 16); and Ispat Industries Ltd. v. Commissioner of Customs (2006) 12 SCC 583 (para 21). The aforesaid judgments only have application when rules are ultra vires the parent statute. In the present case, the rules merely flesh out what is already contained in the statute and must, therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show, a so called condition precedent impossible of compliance cannot be put as a threshold bar to the processing of an application under Section 9 of the Code. 18. However, it was argued that there are various other categories of creditors who cannot file insolvency petitions, such as government authorities who have pending tax dues. Such authorities have ample powers under taxation statutes to coercively collect outstanding tax arrears. Besides they form a class, as a whole, who are kept out of the Code, unlike persons who are resident outside India who, though being operational creditors, are artificially divided, if we are to accept Dr. Singhvi s argument, into two sub-classes, namely, those who bank with an institution that is recognized by Section 3(14) of the Code and those who do not. This argument also does not commend itself to us. 19. 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the corporate debtor can, within a period of 10 days of receipt of the demand notice or copy of the invoice mentioned in subsection (1), bring to the notice of the operational creditor the existence of a dispute or the record of the pendency of a suit or arbitration proceedings, which is pre-existing i.e. before such notice or invoice was received by the corporate debtor. The moment there is existence of such a dispute, the operational creditor gets out of the clutches of the Code. 30. On the other hand, as we have seen, in the case of a corporate debtor who commits a default of a financial debt, the adjudicating authority has merely to see the records of the information utility or other evidence produced by the financial creditor to satisfy itself that a default has occurred. It is of no matter that the debt is disputed so long as the debt is due i.e. payable unless interdicted by some law or has not yet become due in the sense that it is payable at some future date. It is only when this is proved to the satisfaction of the adjudicating authority that the adjudicating authority may reject an application and not otherwise. The fact that these differences obtain under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Privy Council and the House of Lords in the mid 1800s, and has come back to restate the rule somewhat in terms of what was most felicitously put over 400 years ago in Heydon s case . In dealing with penal statutes, the Court was confronted with a body of case law which stated that as penal consequences ensue, the provisions of such statutes should be strictly construed. Here again, the modern trend in construing penal statutes has moved away from a mechanical incantation of strict construction. Several judgments were referred to and it was held that a purposive interpretation of such statutes is not ruled out. Ultimately, it was held that a fair construction of penal statutes based on purposive as well as literal interpretation is the correct modern day approach. 24. However, Dr. Singhvi cited Raghunath Rai Bareja v. Punjab National Bank , (2007) 2 SCC 230 and relied upon paragraphs 39 to 47 for the proposition that the literal construction of a statute is the only mode of interpretation when the statute is clear and unambiguous. Paragraph 43 of the said judgment was relied upon strongly by the learned counsel, which states: In other words, once we depart from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot at all, was followed by the Privy Council in Nazir Ahmad v. King Emperor, 63 IA 372 (1936). In that case, the Privy Council held that Sections 164 and 364 of the Code of Criminal Procedure, 1898 prescribed the mode in which confessions are to be recorded by Magistrates, when made during investigation, and a confession before a Magistrate not recorded in the manner provided was inadmissible. In Ukha Kolhe v. State of Maharashtra (1964) 1 SCR 926 at 948-949, a Constitution Bench of this Court held that the principle contained in Taylor (supra) would not apply when proof of a specified fact could be obtained by means other than that statutorily specified. The argument in that case was that Sections 129A and 129B prescribed the mode of taking blood in the course of investigation of an offence under the Bombay Prohibition Act, 1949, and that, therefore, production or examination of a person before a registered medical practitioner during the course of such investigation is the only method by which consumption of an intoxicant may be proved. After setting out Sections 129A and 129B and the judgment of the Privy Council in Nazir Ahmad (supra), this Court held: The rule in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he inappropriateness of Magistrates being placed in the same position as ordinary citizens and being required to transgress statutory provisions relating to the method of recording confessions also do not arise in the present case. 26. This judgment applies on all fours to the facts of the present case inasmuch as, like Section 129A(8) of the aforesaid Act, proof of the existence of a debt and a default in relation to such debt can be proved by other documentary evidence, as is specifically contemplated by Section 9(3)(d) of the Code. Like Section 66(2) of the aforesaid Act in Ukha Kolhe (supra), Section 8 of the Code does not prescribe any particular method of proof of occurrence of default. Consequently, we are of the opinion that the principle contained in Taylor (supra) does not apply in the present situation. 27. Also, in Madan Co. v. Wazir Jaivir Chand (1989) 1 SCC 264 at 268-270, the interpretation of Section 11 of the Jammu and Kashmir Houses and Shops Rent Control Act, 1966 was under consideration of this Court. As stated in paragraph 4 of the judgment, the controversy in that case turned on the question whether the notice sent by the Respondent by regis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch affixture can be recognised as valid only if sincere and vigilant attempts to serve the notice on the addressee personally are unsuccessful. In the present case, it is submitted, the evidence shows that the postman made no serious efforts to ascertain the whereabouts of the addressee even though the evidence showed that a servant of the petitioner firm was known to the postman and was present in the neighbourhood. He, therefore, submitted that the High Court should have dismissed the suit for eviction filed by the landlord on the ground that the requirements of Sections 11 and 12 of the Act were not satisfied. The Court turned down the contention based on Taylor (supra) in the following terms: We are of opinion that the conclusion arrived at by the courts below is correct and should be upheld. It is true that the proviso to clause (i) of Section 11(1) and the proviso to Section 12(3) are intended for the protection of the tenant. Nevertheless it will be easy to see that too strict and literal a compliance of their language would be impractical and unworkable. xxx xxx xxx In this situation, we have to choose the more reasonable, effective, equitable and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Code differentiates two categories of creditors: financial creditors where the liability to the debtor arises from a solely financial transaction, and operational creditors where the liability to the debtor arises in the form of future payments in exchange for goods or services already delivered. In cases where a creditor has both a solely financial transaction as well as an operational transaction with the entity, the creditor will be considered a financial creditor to the extent of the financial debt and an operational creditor to the extent of the operational debt is more than half the full liability it has with the debtor. 4. The Code will require different documentation for a debtor, a financial creditor, and an operational creditor to trigger the IRP. These are listed Box 5.3 under what the Adjudicator will accept as requirements to trigger the IRP. 30. Item 2 in Box 5.2 does show that for the corporate debtor to trigger the IRP, it must be able to submit all the documentation that is defined in the Code and that different documentation is required insofar as financial creditors and operational creditors are concerne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the conclusion that the period mentioned in proviso is mandatory. The order of the NCLAT, thereafter, proceeds to take note of the provisions of Section 12 of the Code and points out the time limit for completion of insolvency resolution process is 180 days, which period can be extended by another 90 days. However, that can hardly provide any justification to construe the provisions of proviso to sub-section (5) of Section 9 in the manner in which it is done. It is to be borne in mind that limit of 180 days mentioned in Section 12 also starts from the date of admission of the application. Period prior thereto which is consumed, after the filing of the application under Section 9 (or for that matter under Section 7 or Section 10), whether by the Registry of the adjudicating authority in scrutinising the application or by the applicant in removing the defects or by the adjudicating authority in admitting the application is not to be taken into account. In fact, till the objections are removed it is not to be treated as application validly filed inasmuch as only after the application is complete in every respect it is required to be entertained. In this scenario, making the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority is satisfied that such a case is shown, only then it would entertain the application on merits, otherwise it will have right to dismiss the application. This judgment also lends support to the argument for the appellant in that it is well settled that procedure is the handmaid of justice and a procedural provision cannot be stretched and considered as mandatory, when it causes serious general inconvenience. As has been held in Mahanth Ram Das v. Ganga Das (1961) 3 SCR 763 at 767-768, we have traveled far from the days of the laws of the Medes and the Persians wherein, once a decree was promulgated, it was cast in stone and could not be varied or extended later: Such procedural orders, though peremptory (conditional decrees apart) are, in essence, in terrorem, so that dilatory litigants might put themselves in order and avoid delay. They do not, however, completely estop a court from taking note of events and circumstances which happen within the time fixed. For example, it cannot be said that, if the appellant had started with the full money ordered to be paid and came well in time but was set upon and robbed by thieves the day previous, he could not ask for exten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person legally authorised to take evidence; and (iii) before any other authority or person before whom such advocate is by or under any law for the time being in force entitled to practise. That the expression practise is an expression of extremely wide import, and would include all preparatory steps leading to the filing of an application before a Tribunal. This is clear from a Constitution Bench judgment of this Court in Harish Uppal (Ex-Capt.) v. Union of India , (2003) 2 SCC 45 at 72, which states: The right of the advocate to practise envelopes a lot of acts to be performed by him in discharge of his professional duties. Apart from appearing in the courts he can be consulted by his clients, he can give his legal opinion whenever sought for, he can draft instruments, pleadings, affidavits or any other documents, he can participate in any conference involving legal discussions, he can work in any office or firm as a legal officer, he can appear for clients before an arbitrator or arbitrators etc. 35. The doctrine of harmonious construction of a statute extends also to a harmonious construction of all statutes made by Parliament. In Harshad S. Mehta v. Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cases before the Magistrate. The expression trial is not defined in the Act or the Code. For the purpose of the Act, it has a wider connotation and also includes in it the pre-trial stage as well. Section 9(2) makes the Special Court, a Court of Session by a fiction by providing that the Special Court shall be deemed to be a Court of Session and shall have all the powers of a Court of Session. In case, the Special Court is held not to have the dual capacity and powers both of the Magistrate and the Court of Session, depending upon the stage of the case, there will be a complete hiatus. It is also to be kept in view that the Special Court under the Act comprises of a High Court Judge and it is a court of exclusive jurisdiction in respect of any offence as provided in Section 3(2) which will include offences under the Indian Penal Code, the Prevention of Corruption Act and other penal laws. It is only in the event of inconsistency that the provisions of the Act would prevail as provided in Section 13 thereof. Any other interpretation will make the provision of the Act unworkable which could not be the intention of the legislature. Section 9(2) does not exclude Sections 306 to 308 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ail those benefits or not. On the other hand, purpose behind enacting Section 139-AA of the Act is to check a menace of black money as well as money laundering and also to widen the income tax net so as to cover those persons who are evading the payment of tax. 36. The non-obstante clause contained in Section 238 of the Code will not override the Advocates Act as there is no inconsistency between Section 9, read with the Adjudicating Authority Rules and Forms referred to hereinabove, and the Advocates Act. In Balchand Jain v. State of M.P. (1976) 4 SCC 572 at 585-86, the anticipatory bail provision contained in Section 438 of the Code of Criminal Procedure was held not to be wiped out by the non-obstante clause contained in Rule 184 of the Defence and Internal Security of India Rules, 1971. Fazal Ali, J. concurring with the main judgment, held: 16. Having regard to the principles enunciated above, we feel that there does not appear to be any direct conflict between the provisions of Rule 184 of the Rules and Section 438 of the Code. However, we hold that the conditions required by Rule 184 of the Rules must be impliedly imported in Section 438 of the Code so as to form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supersede the Special Rules. The amendment also must be read as being subject to Rules 1(3)(a), 3(1) and 4(2) of the General Rules themselves. The amendment cannot be read as abrogating all other Special Rules in respect of all departments. In a given case where there are no Special Rules then naturally the General Rules would be applicable. Just because there is a non-obstante clause, in Rule 3(2) it cannot be interpreted that the said amendment to the General Rules though later in point of time would abrogate the special rule the scope of which is very clear and which co-exists particularly when no patent conflict or inconsistency can be spelt out. As already noted Rules 1(3)(a), 3(1) and 4 of the General Rules themselves provide for promotion by selection and for enforceability of the Special Rules in that regard. Therefore there is no patent conflict or inconsistency at all between the General and the Special Rules. In Central Bank of India v. State of Kerala (2009) 4 SCC 94 at 141-42, the non-obstante clauses contained in Section 34(1) of Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and Section 35 of the Securitisation and Reconstruction of Financ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sult that a notice sent on behalf of an operational creditor by a lawyer would be in order. 37. However, Dr. Singhvi referred to Rule 4 of the Debts Recovery Rules and Section 434(2) of the Companies Act, 1956, which state as follows: 4. Procedure for filing applications .- (1) The application under section 19 or section 31A, or under section 30(1) of the Act may be presented as nearly as possible in Form-I, Form-II and Form-III respectively annexed to these rules by the applicant in person or by his agent or by a duly authorised legal practitioner to the Registrar of the Bench within whose jurisdiction his case falls or shall be sent by registered post addressed to the Registrar. (2) An application sent by post under sub-rule (1) shall be deemed to have been presented to the Registrar the day on which it was received in the office of the Registrar. (3) The application under sub-rule (1) shall be presented in two sets, in a paper book along with an empty file size envelope bearing full address of the defendant and where the number of defendants is more than one, then sufficient number of extra paper-books together with empty file size envelopes bearing full ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties, the legislature cannot, in the absence of express words to such effect, be presumed to have disallowed the parties to enter into a compromise by counsel in their cause or by their duly authorised agents. Any such presumption would be inconsistent with the legislative object of attaining quick reduction of arrears in court by elimination of uncertainties and enlargement of the scope of compromise. 39. To insist upon the party himself personally signing the agreement or compromise would often cause undue delay, loss and inconvenience, especially in the case of non-resident persons. It has always been universally understood that a party can always act by his duly authorised representative. If a power-of-attorney holder can enter into an agreement or compromise on behalf of his principal, so can counsel, possessed of the requisite authorisation by vakalatnama, act on behalf of his client. Not to recognise such capacity is not only to cause much inconvenience and loss to the parties personally, but also to delay the progress of proceedings in court. If the legislature had intended to make such a fundamental change, even at the risk of delay, inconvenience and needless exp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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