No Interest Can be Claimed In Insolvency Petition Without Prior Intimation to Corporate Debtor: NCLT [Read Order]
The NCLT observed that no interest can be claimed in the petition when it has not been agreed upon in an agreement.
No Interest – Claimed In Insolvency Petition – Prior Intimation to Corporate Debtor – NCLT – TAXSCAN
No Interest – Claimed In Insolvency Petition – Prior Intimation to Corporate Debtor – NCLT – TAXSCAN
The Bengaluru bench of the National Company Law Tribunal (NCLT),while dismissing a petition under section 9 of the Insolvency and Bankruptcy Code (IBC), 2016 held that no interest can be claimed in insolvency petition without prior intimation to corporate debtor.
The petition was filed by Janus GBAC Ltd., operational creditor against Beloorbayir Biotech Ltd., corporate debtor. The corporate debtor was admitted into insolvency under section 9 of the IBC. The amount to the tune Rs. USD 140,513.09 along with interest of Rs. USD 35,212 was claimed by the operational creditor. However, if the interest is excluded from the claimed amount, the amount to be claimed stood to the tune of Rs. USD 105,300. This petition was filed on July 27, 2023.
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The operational creditor contended that corporate debtor defaulted in clearing its liabilities to the tune Rs. USD 140,513.09 along with interest of Rs. USD 35,212. This amount exceeded the threshold limit under section 4 of the IBC to initiate CIRP. It was further argued that goods were supplied and mediation was attempted under section 12A of the Commercial Court Act, 2015 still the corporate debtor remained unresponsive and failed to pay the outstanding dues.
Per Contra, the corporate debtor contended that the interest amount cannot be claimed as there was no agreement to that effect nor was there any such clause in invoice raised. The NCLT further noted that invoice raised on March 3, 2020 had not become due yet as agreement allowed time period of 7 days to make the payment.
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The Tribunal noted that the payment became due on March 3, 2020 for which the limitation period expired on March 14, 2023. It was viewed that the operational creditor was entitled to 379 days as it is the period left in the period of limitation after February 28, 2022.
The bench comprising Shri K. Biswal (Judicial Member) and Shri Manoj Kumar Dubey (Technical Member) ruled that the operational creditor was not entitled to claim interest as it was not agreed upon to be paid in the agreement. The Tribunal held that the petition was filed when limitation period had expired therefore the petition was barred by limitation also. Accordingly, the present petition was dismissed.
To Read the full text of the Order CLICK HERE
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