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TMI Blog2022 (4) TMI 1302X X X X Extracts X X X X X X X X Extracts X X X X ..... wber Beekay Private Limited was transferred to BSBK Enviro Systems Private Limited. The erstwhile Macawber Beekay Private Limited got amalgamated with another company and Macawber Beekay Private Limited is no longer in existence w.e.f. 30.11.2015. The name of BSBK Enviro Systems Private Limited was changed to Macawber Beekay Private Limited. The Operational Creditor had duly executed all the works under the contracts entrusted by the Corporate Debtor and there is no dispute. However certain payments that were due to be made by the Corporate Debtor were not made. A letter was issued on 21.09.2017 to the Corporate Debtor seeking the release of the outstanding amount. Subsequent to the said letter, a meeting was convened on 19.04.2018, to discuss about the payments in detail and in the said meeting the Corporate Debtor stated that it would verify the amounts due. Thereafter, the Operational Creditor again requested the Corporate Debtor through a letter dated 18.08.2018 to release the outstanding amounts. Thereafter both the parties had a meeting on 19.09.2018, to amicably resolve the issue of outstanding payment and release of Bank Guarantees. In the said meeting, the Corporate Debt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on is liable to be dismissed. 4. Rejoinder is filed by the Operational Creditor, contending that while the contracts under the minutes of the meeting dated 19.09.2018 do not contain a clause for payment of interest, there is no clause barring payment of interest in the event of delay in payment. Hence, he seeks for the Petition to be allowed. 5. Heard the arguments of both sides and perused the written submissions filed by the either side. There is no dispute that the principal amount that is due to the Operational Creditor is paid before and after the issuance of the demand notice and there is no dispute that there is no clause of interest in the Minutes of Meeting (MOM) at 19.09.2018 which recorded a settlement between the parties. The only question that remains to be decided is; "Whether the Application under Section 9 of IBC can be continued for mere claim of interest. " The definition of the operational debt is as under; "Section 5 (21) of IBC: "operational debt" means a claim in respect of the provision of goods or services including employment or a debt in respect of the repayment of dues arising under any law for the time being in force and payable to the Central Gov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arise. NCLAT in Ranjeet Singh and others Vs. Karan Motors private Limited and others in MANU/NL/0346/2021 observed that "if on delayed payment, the Applicant claims any interest, it will be open to it to move a Court of competent jurisdiction for recovery of interest. But initiation of the CIRP is not the answer. The law is well settled that unless there is a specific covenant as to payment of interest in the agreement, interest cannot be claimed for an operational debt if in terms of any agreement interest is payable to the operational or financial creditor then debt includes interest and otherwise the principal amount is to be treated as debt which is the liability in respect of the claim which can be made from the Corporate Debtor". NCLAT in Krishna Enterprises and others Vs. Gammon India Limited MANU/NL/0359/2018 held that "when principal amount is already paid and as per the agreement no interest was payable, the applications under Section 9, on the basis of claims for entitlement of interest, are not maintainable." It also held that if for delayed payment the appellant claims any interest it will be open for it to move a court of competent jurisdiction, but initiation of CIRP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pute and even if the ratio of the said judgment is applied, the present petition is liable to be dismissed, since it is only interest which is in dispute. Judgment of NCLT, Hyderabad in Shri Shri Krishna Rail Engineers Pvt. Ltd. VS Madhucon Projects Limited in CP (IB) No. 305/9/HDB/2017 is also rendered on different set of facts. The issue before me is not whether the Operational Creditor is entitled for interest on delayed payment. The issue is whether an application under Section 7 of IBC can be prosecuted only for interest. Hence the said judgment would not help in deciding this issue. So, also the judgment of the Supreme Court in Assam State Electricity Board & Others vs Buildworth Pvt. Ltd. in Civil Appeal No. 484 of 2008, judgment of NCLT, Ahmedabad in Lint Fa Pie Ltd. VS Pioneer Globex Pvt. Ltd. (CP (LB) No. 82/NCLT/AHM/2018) and the judgement of NCLT, Hyderabad in CP (IB) No. 305/9/HDB/2017 in Shri Shri Krishna Rail Engineers Pvt. Ltd. VS Madhucon Projects Limited. Though the common practice is that the amount paid towards discharge of a debt would be appropriated towards interest first, in the written arguments of the Operational Creditor it is clearly admitted that the C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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