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TMI Blog2025 (1) TMI 793X X X X Extracts X X X X X X X X Extracts X X X X ..... e Central Government, any State Government or any local authority; of the IBC restricts claims to those arising from goods or services, and interest is recoverable only when expressly agreed upon by the parties. In the absence of such agreement, the interest component cannot be considered part of the operational debt. Consequently, without interest the outstanding principal amount alone is Rs 60,44,800/- and is well below the threshold of Rs 1 crore specified under Section 4 of the IBC. No interest can be charged against the supply of goods and services for delayed payments until and unless there is an express agreement between the parties - there are justification in the claim of the Respondent that the interest claim was unilaterally imposed and lacked any contractual basis. Exclusion of Claims falling within the Section 10 A period - HELD THAT:- The Respondent has placed his reliance on the judgment of this Tribunal in DECOR PAPER MILLS LTD. VERSUS MAHASHAKTI PLASTO PVT. LTD. [ 2024 (11) TMI 1412 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI [LB]] which establishes that invoices falling within the 10 A period must be excluded from default claims. Therefore, the Applicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the supply of the good which includes various types of the chemicals for their textile business. The Appellant from time to time has supplied the required materials to the Corporate Debtor and the same was accepted by the Corporate Debtor without any demur. For the material supplied by the Appellant, the Appellant had raised the invoices from time to time from 2019 to 2021 upon the Corporate Debtor. All the invoices were accepted by the Corporate Debtor, along with the conditions mentioned therein. All the invoices received by the Corporate Debtor contain the clause for interest amount on the delayed payment after the due date, i.e. the interest @24% per annum will be charged after the due date which is the outer limit for considering the interest component. The Corporate Debtor had paid a certain amount to the Appellant but failed to perform its duty by paying all invoices in timely manner. Thereby, the Corporate Debtor defaulted in making the payment to the Appellant. Thereafter, the Appellant filed the summary suit for the recovery before the Hon'ble City Civil and Sessions Court Ahmedabad vide Commercial Civil Suit No. 194 of 2023 on 01.05.2023 and it is pending before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l as the due dates of the payment of each invoices, which were filed by an Affidavit dated 09.12.2023. The Ld. NCLT passed Impugned Order dated 02.07.2024 by which it dismissed the CP (IB) No. 275 of 2023 on the ground that (i) debt claimed is below the threshold limit specified under the Section 4 of the IBC (ii) interest amount is disputed. The Ld. NCLT has erred in not considering the interest amount on the delayed payment which is clearly mentioned in the invoices that interest will be charged on the delayed payment at the interest rate of the 24%. All the invoices were sent by the Appellant to the Respondent and the same was accepted by the Respondent without any demur. Further, the Ld. NCLT erred in considering that the invoices fall within Section 10 A of the IBC. Being aggrieved by the Impugned Order dated 02.07.2024, the present Appeal is being filed. Submissions of the Respondent 5. Briefly, the Respondent submits that the Appeal is without merit and barred by law. The Appellant is attempting to misuse the IBC framework as a recovery mechanism, which is an abuse of the process. The Appellant is trying to arm-twist the Respondent despite the latter being a solvent company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of dues that occurred during the restricted period. Therefore, the default amount for these invoices cannot be claimed under Section 9 of the IBC. Even after excluding the default amount related to the invoices during the 10 A period, the total outstanding dues worth Rs 23,98,600 (rupees twenty-three lakhs, ninety-eight thousand and six hundred only) still do not meet the threshold required for initiating insolvency proceedings. Furthermore, when considering the total default amount of Rs 1,36,30,679/- (rupees one crore, thirty-six lakhs, thirty thousand, six hundred and seventy-nine only) (principal plus alleged interest), after excluding the Rs 36,46,200/- (rupees thirty-six lakhs, forty-six thousand and two hundred only) default during the 10 A period, the remaining default amount is Rs 99,84,479/- (rupees ninety-nine lakhs, eighty-four thousand, four hundred and seventy-nine only) which is again below the IBC threshold. 8. The Respondent cites the case of Decor Paper Mills Ltd vs Mahashakti Plasto Pvt Ltd [Company Appeal (AT) (Insolvency) No. 2022 of 2024], which establishes that invoices falling within the 10 A period must be excluded from default claims. Therefore, the App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms and Exports Limited, primarily on the grounds that the debt claimed was below the statutory threshold limit of rupees one crore as specified under Section 4 of the IBC and that the interest amount claimed was disputed. It is claimed that the Corporate Debtor was liable to make payment of Rs 1,36,30,679 (rupees one crore, thirty-six lakhs, thirty thousand, six hundred and seventy-nine only), [Rs 60,44,800/- (rupees sixty lakhs, forty-four thousand and eight hundred only) towards principal, Rs 45,01,893/- (rupees forty-five lakhs, one thousand, eight hundred and ninety-three only) towards interest @ 24% on outstanding principal amount and Rs 30,83,986/- (rupees thirty lakhs, eighty-three thousand, nine hundred and eighty-six only) towards interest @ 24% per annum on delayed payment made]. It also claims that there is a clause for the payment of interest @ 24% in all the invoices received by the Corporate Debtor. 14. Per contra, the Respondent/Corporate Debtor contends that Purchase Orders between them never stipulated any provision for interest on delayed payment. It is also contended by the Respondent that the Appellant had never charged any interest on delayed payment and it had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t clauses, which were not part of the formal agreement, are unenforceable. This judgment supports the case of the Respondent. 18. Accordingly, we agree with the submissions of the Respondent and also the findings of the Adjudicating Authority that no interest can be charged against the supply of goods and services for delayed payments until and unless there is an express agreement between the parties. We find justification in the claim of the Respondent that the interest claim was unilaterally imposed and lacked any contractual basis. 19. Next we look into the exclusion of Claims falling within the Section 10 A period. The invoices dated between 29.11.2019 and 07.02.2020, amounting to Rs 36,46,200/- (rupees thirty-six lakhs, forty-six thousand and two hundred only) fall within the restricted period under Section 10 A of the IBC. As such, defaults related to these invoices cannot form the basis of an Insolvency Application. Deducting this amount from the total alleged outstanding of Rs 1,36,30,679/- (rupees one crore, thirty-six lakhs, thirty thousand, six hundred and seventy-nine only) reduces the admissible claim to Rs 99,84,479/- (rupees ninety-nine lakhs, eighty-four thousand, f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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