Interest Can Be Added To Reach 1 Crore Threshold Only If Provided In The Agreement : NCLT New Delhi Reiterates
The National Company Law Tribunal, New Delhi Bench, comprising Shri Bachu Venkat Balram Das (Judicial Member) and Shri L.N. Gupta (Technical Member), while adjudicating an application under Section 9 of Insolvency and Bankruptcy Code, 2016 (“IBC, 2016”) in M/s Bhotika Trade and Services Pvt. Ltd. vs M/s. Avinash EM Projects Pvt. Ltd. has reiterated that interest can be charged...
The National Company Law Tribunal, New Delhi Bench, comprising Shri Bachu Venkat Balram Das (Judicial Member) and Shri L.N. Gupta (Technical Member), while adjudicating an application under Section 9 of Insolvency and Bankruptcy Code, 2016 (“IBC, 2016”) in M/s Bhotika Trade and Services Pvt. Ltd. vs M/s. Avinash EM Projects Pvt. Ltd. has reiterated that interest can be charged on Operational Debt only if it is clearly stipulated in the invoices raised.
Background Facts
M/s Bhotika Trade and Services Pvt. Ltd. (“Operational Creditor”) sold various construction and welding equipments to M/s. Avinash EM Projects Pvt. Ltd. (“Corporate Debtor”) in 2013 and 2014. It was contended by the Operational Creditor that the goods had been sold on credit and the Operational Creditor accepted debit balance confirmations from the Corporate Debtor. Due to non-payment of the outstanding dues, the Operational Creditor was constrained to issue a Demand Notice dated 18.02.2022.
On the contrary, it was contended by the Corporate Debtor that there is a dispute between the parties regarding the quality of the goods supplied due to which the payment was not made to the Operational Debtor.
Findings of the Tribunal
The Tribunal observed that the Operational Creditor has not clearly mentioned the particulars of the unpaid invoices in Part IV of the petition. There were 4 invoices which were raised in 2013. The Operational Creditor has claimed a Principal Amount of Rs. 51,85,102 and interest of Rs. 48,45,033. However, it was observed that none of the invoices had a clause which mentioned that the Operational Creditor would be entitled to an interest amount in case of default. There is further no specific agreement pursuant to which interest could be claimed or a delayed payment clause with interest in the invoices. It was thus observed by the Tribunal that interest cannot be claimed merely to reach the 1 crore threshold. Reliance was placed on the NCLAT judgment of Pavan Enterprises vs Gammon India Ltd [Company in Appeal(AT)(Insolvency) No. 148 of 2018 wherein it was held that debt will include interest if it is payable in the terms of the agreement. Further Reliance was placed on the NCLAT judgment of Prashant Agarwal vs Vikash Parasrampuria & Anr. [Company Appeal (AT) No. 690 of 2022] wherein it was held that total amount of maintainability of a claim will include interest on delayed payment clearly stipulated in the invoice itself.
With the aforesaid observations, the Tribunal dismissed the petition.
Case:M/s Bhotika Trade and Services Pvt. Ltd. vs M/s. Avinash EM Projects Pvt. Ltd.
Case No. ;(IB)-598(ND)2022
Counsels for the Applicants;Adv. Anup Kumar D Sayare
Counsel for the Respondent ;Adv. A. K. Singh