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TMI Blog2020 (10) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... for interest was sustainable when neither the purchase order nor the invoices carried a provision therefor. In the present case, the claim for interest has been brought against the Corporate Debtor even though it was never put on notice that the Operational Creditor was registered under MSME Act. The present petition fails and therefore, the same is rejected - petition dismissed. - CP (IB) No. 1579/MB/C-IV/2019 - - - Dated:- 28-4-2020 - Rajasekhar V. K. , Member ( J ) And Ravikumar Duraisamy , Member ( T ) For the Appellant : Abhay Kumar Jain, Divya Momaya, Authorised Representative For the Respondent : Shyam Kapadia, Anaisha Zachariah and Ragini Jaitha i/b Crawford Bayley Co, Advocate ORDER Rajasekhar V.K., Member (J) 1. This is a Company Petition filed under section 9 of the Insolvency Bankruptcy Code, 2016 ( IBC ) by Vitson Steel Corp Private Limited ( the Operational Creditor ) [CIN: U51420KL2012PTC032061], a company within the meaning of section 2(20) of the Companies Act, 2013 and represented by its Manager, Mr. AH Quadri, on the basis of a Board Resolution dated 20.03.2019 seeking to initiate Corporate Insolvency Resolution Process ( CIRP ) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... component of 24% per annum is neither tenable nor payable, since it was never contracted for. The reply has been annexed at Exhibit '8' at pp. 30 of the Petition. 7. Mr. Shyam Kapadia, learned Counsel appeared on behalf of the Corporate Debtor and made his submissions. 8. In its reply dated 19.09.2019, the Corporate Debtor has submitted as follows:- (a) The petition is defective since the bank certificate as mandated by section 9(3)(c) has not been attached to the petition. (para 6.1 at page 90-91 of the Reply); (b) Subsequent to receipt of the Demand Notice, the Corporate Debtor has made payment of a sum of ₹ 15.00 lakh to the Operational creditor on 05.03.2019. Further, in its email date 12.03.2019, the Corporate Debtor has categorically stated that all payments have been made and that the interest calculated at 24% per annum was unilateral and not contracted for (para 6.2.1 at page 9 of the Reply); (c) The Operational Creditor has failed to comply with its statutory liabilities in not depositing GST on the invoices. This has been brought to the notice of the Operational Creditor vide email dated 19.08.2019. The GST liability amounts to ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther, the sum total of the two invoices works out to ₹ 19,60,498/- only, whereas the computation of claim at pp. 21-22 lists out ninety-two invoices from 02.03.2017 to 27.12.2017 for which interest is being claimed now. There is no provision for interest in the invoices or in the purchase order. In other words, there is no contractual rate of interest. 12. If the Operational Creditor is an MSME registered under the MSME Act, 2006, the interest component is covered under section 16 of the said Act. Section 17 of the said Act details the mode of recovery due. In such cases, a reference to the Micro and Small Enterprises Facilitation Council may be made under section 18(1) of the Act. 13. In the original petition, interest was being claimed at the rate of 24% per annum based on industry practice. However, in the revised petition, the Operational creditor has stated that it is entitled to claim interest at three times the bank rate compounded at monthly rests. 14. Mr. Shyam Kapadia, learned Counsel for the Corporate Debtor, has repeatedly submitted during the course of hearing that the corporate debtor is ready and willing to make full payment of the principal amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 11.08.2017 of the Hon'ble NCLAT in the matter of Wanbury Limited v Panacea Biotech Limited 2017 SCC OnLine NCLAT 238, in support of his claim that interest claim does not fall under operational debt. This was a matter taken in appeal from a decision dated 18.04.2017 of the NCLT Chandigarh Bench which held that the definition of the term operational debt under section 5(21) of the Code does not include interest. 20. The petition itself is based primarily for interest, since the Corporate Debtor was ready and willing even during the course of hearings to pay the full amount of the principal sum outstanding, if any. Further, there is no clarity with reference to the claim itself in the present petition, as stated in paras 10 and 11 supra. Therefore, we are not convinced that this is a fit case for initiation of CIRP against the Corporate Debtor. 21. We may record here that the Operational Creditor has repeatedly spurned the offer of the Corporate Debtor to make payment of the principal sums due. However, in the interest of justice and because the Corporate Debtor has, during the course of hearings, repeatedly expressed its intention to settle the principal sum due, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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