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Home Case Index All Cases Insolvency and Bankruptcy Insolvency and Bankruptcy + Tri Insolvency and Bankruptcy - 2021 (5) TMI Tri This

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2021 (5) TMI 545 - Tri - Insolvency and Bankruptcy


Issues:
Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 for initiation of Corporate Insolvency Resolution Process based on default by the Corporate Debtor. Dispute regarding the claimed amount and interest rate of 24% per annum. Allegations of suppression of material facts by the Operational Creditor. Payment made by the Corporate Debtor during the pendency of the proceedings. Entitlement of the Operational Creditor to claim interest on delayed payment and the rate of interest.

Analysis:
The application was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process against the Corporate Debtor for defaulting an amount along with interest at 24% per annum. The Operational Creditor claimed a total amount due, including interest, based on invoices and a demand notice sent to the Corporate Debtor. However, the Corporate Debtor disputed the claim, alleging suppression of material facts and stating that payments were made towards the outstanding amount.

The Corporate Debtor contended that payments were made during the pendency of the proceedings, reducing the outstanding balance. The Corporate Debtor argued that the Operational Creditor's claim of interest at 24% per annum was not valid as there was no contractual stipulation on the payment period. The Corporate Debtor maintained that all payments related to the disputed invoice were settled between the parties, and no outstanding dues existed.

The Tribunal noted that the Operational Creditor's claim was based on delayed payment and interest at 24% per annum, but the validity of claiming interest at this rate required a detailed trial. The Tribunal emphasized that the matter of interest could not be summarily decided based on a single unsigned invoice without considering other transactions and business dealings between the parties. Therefore, the Tribunal dismissed the application, stating that the issue of interest entitlement required a comprehensive trial in the City Civil Court.

In conclusion, the Tribunal dismissed the application under Section 9, highlighting the need for a detailed trial to determine the validity of the Operational Creditor's claim for interest on delayed payment. The judgment underscored the importance of considering all relevant transactions and agreements between the parties before deciding on the interest rate and amount due, emphasizing the need for a comprehensive legal process to resolve the dispute effectively.

 

 

 

 

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