NCLAT Upholds Rejection Of Application U/S 9 Of IBC Against Hindustan Unilever Limited
Tazeen Ahmed
29 Jan 2025 12:45 PM
The National Company Law Appellate Tribunal (NCLAT) bench of Justice Ashok Bhushan (Chairperson) and Arun Baroka (Technical Member) has dismissed the appeal against the order rejecting the application under section 9 of the Insolvency and Bankruptcy Code filed against Hindustan Unilever Limited on the ground that the claims were below the threshold limit, time-barred and there was a...
The National Company Law Appellate Tribunal (NCLAT) bench of Justice Ashok Bhushan (Chairperson) and Arun Baroka (Technical Member) has dismissed the appeal against the order rejecting the application under section 9 of the Insolvency and Bankruptcy Code filed against Hindustan Unilever Limited on the ground that the claims were below the threshold limit, time-barred and there was a pre-existing dispute.
Background Facts
The Appellant-Operational Creditor had filed an application against Hindustan Unilever Ltd. under section 9 of the Code. The Adjudicating Authority rejected the application by the impugned order dated 5.09.2024 on the grounds that only a few invoices fell within the three year limitation period, the total claim amount was less than Rs. 1 crore and there was a pre-existing dispute.
Submission
Counsel for the Appellant submitted that the Appellant was entitled to charge 24% interest and in event, Principal Amount i.e. Rs. 59 Lakhs is added to 24% interest amount, it will be more than Rs. 1 Crore.
Counsel for the Respondent submitted that in event the cheque is deposited and bounced, only then a penalty of 24% is to be imposed per the Credit Terms.
Findings
The NCLAT upheld the impugned order. It noted that the invoices which were within three years of limitation were much below the threshold of Rs. 1 crore.
The Tribunal held that the Appellant's claim that he is entitled for charging 24% interest was not backed by any Purchase Order. It noted that under the Creditor Terms, the Operational Creditor was entitled to charge 24% penalty in event of delayed payment to the Operational Creditor.
The Tribunal observed that a pre-existing dispute was indicated by the legal notice dated 17.01.2019.
The Tribunal dismissed the appeal.
Case Title: K. Lakshmi Narayana v. Hindustan Unilever Ltd.
Case Number: Company Appeal (AT) (Insolvency) No. 2105 of 2024
Date of Order: 27.01.2025