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TMI Blog2019 (6) TMI 967X X X X Extracts X X X X X X X X Extracts X X X X ..... .09.2018 on 27.09.2018. 2. Upon service of Section 8 notice dated 26.09.2018 against the Corporate Debtor and the notice in the company petition, the Corporate Debtor filed Vakalatnama and also appeared before this Bench in the past hearings but whereas he has remained absent today. No reply was given by the Debtor to the section 8 notice sent by the creditor. 3. On perusal of the record, it appears that the Corporate Debtor placed Purchase Orders dated 02.08.2011 and 05.08.2011 upon the Operational Creditor for purchase of TMT Bars for the business of the Corporate Debtor. In view of the same, the Operational Creditor supplied the said goods by raising invoice for an amount of Rs. 16,30,583 on 04.08.2011 and for an amount of Rs. 14,96,708 by raising invoice on 08.08.2011. Thereafter, it appears that this Corporate Debtor made some payments, as to remaining balance, the debtor kept on providing acknowledgements on 24.03.2014, 15.03.2016 and 26.03.2018 acknowledging the outstanding amount of Rs. 21,27,291 regarding the balance payable towards the supplies made to the Corporate Debtor herein. 4. Looking at the interest lying with the Operational Creditor, when this Bench has put i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reditor. 7. In Krishna Enterprises v. Gammon India Ltd., (2018 SCC OnLine NCLAT 360 dated 27-07-2018) the original court i.e., NCLT held that since principal was already paid, the claim for interest in the name of operational debt u/s 9 of the Code would not lie, when Appeal went to Honourable NCLAT, it was held as follows: "3. According to learned counsel for the Appellant in terms of Section 3(6) of I&B Code 'claim' means a right of payment, whether such right is reduced to judgment, fixed disputed, undisputed, legal, equitable, etc. Reliance has been placed on definition of 'debt' as defined in Section 3(11) as per which 'debt' means a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt. 4. It is submitted that the 'debt' includes the interest, but such submission cannot be accepted in deciding all claims. If in terms of any agreement interest is payable to the Operational or Financial Creditor then debt will include interest, otherwise, the principle amount is to be treated as the debt which is the liability in respect of the claim which can be made from the Corporate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove is not applicable to the present case. 11. As to the present case is concerned, it is a debt raised in the year 2011, ever since it has not been paid, but from time to time it has been acknowledged by the corporate debtor. 12. Having regard to the interest on unpaid principal debt amount, Sale of Goods Act says though nothing has been stipulated between the parties regarding payment of interest in the event of failure to pay on the invoices raised, still the court is competent to award interest at such rate as it thinks fit. In this case though the creditor has asked 24%, this Bench has reduced it to 12% per annum. This proposition has been invoked in catena of judgments passed by Honourable High Courts. I must also mention here that the Honourable NCLAT has already clarified that IB proceeding is not adversarial proceeding, therefore the judgments governing the field need not be detailed out. 13. Moreover it is also pertinent to mention that it has not been envisaged under any of the Sections of this Code that operational creditors are not entitled to claim interest over the principal, whether it is said or not said, it is a fact, on credit transactions, value addition kee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before civil court, the creditor can proceed before civil court, because the creditor is not remediless. This argument or proposition remains right if any prohibition to claim interest by operational creditor is envisaged under the Code, as long as such prohibition is absent, the operational creditor obviously can claim interest as envisaged under Sale of Goods Act. 17. The ratio decided in Stephen Chemical Ltd. v. Innosearch Ltd. [1986] 60 Comp Cas 702 (Punj. & Har.); Rashid Leathers (P.) Ltd. v. Superfine Skin Traders [1990] 68 Comp Cas 684 (Mad); Devendra Kumar Jain v. Polar Forgings & Tools Ltd. [1995] 84 Comp Cas 766 Delhi), held that in absence of an agreement between the parties as to the rate of interest, the Company Court can determine the reasonable rate of interest to avoid multiplicity of proceedings. 18. As to notwithstanding clause is concerned, even without touching any ratio from any judgment, it could be construed that Section 238 of the Code comes into play when any provision of other law will have adverse impact on the operation of the Code. Here section 61 of Sale of Goods Act is not inconsistent with any of the provisions of the Code; indeed it is supplementa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act); (d) The recovery of any property by an owner or lessor where such property is occupied by or in the possession of the Corporate Debtor. (II) That the supply of essential goods or services to the corporate debtor, if continuing, shall not be terminated or suspended or interrupted during moratorium period. (III) That the provisions of sub-section (1) of Section 14 shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator. (IV) That the order of moratorium shall have effect from 25.04.2019 till the completion of the corporate insolvency resolution process or until this Bench approves the resolution plan under sub-section (1) of section 31 or passes an order for liquidation of corporate debtor under section 33, as the case may be. (V) That the public announcement of the Corporate Insolvency Resolution Process shall be made immediately as specified under Section 13 of the Code. (VI) That this Bench hereby appoints Mr. Karuppiah Muru ..... X X X X Extracts X X X X X X X X Extracts X X X X
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