NCLAT held that operational debt interest claims require ...

Corporate Debt Resolution: Operational Creditors Cannot Unilaterally Claim Interest Without Explicit Contractual Agreement Under Section 9

April 21, 2025

Case Laws IBC AT

NCLAT held that operational debt interest claims require explicit contractual agreement. The tribunal rejected the operational creditor's interest component in the Section 9 Application due to absence of specific contractual provisions. The Code's deliberate exclusion of interest from operational debt definition mandates that interest cannot be unilaterally imposed without mutual consent. The principal amount was ordered to be released to the respondent, effectively allowing the appeal while dismissing the interest claim. The tribunal emphasized that initiating corporate insolvency resolution process would not serve the Code's objective of maximizing debtor's asset value. Appeal was consequently allowed with the principal amount being released.

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NCLAT held that operational debt interest claims require ...

Corporate Debt Resolution: Operational Creditors Cannot Unilaterally Claim Interest Without Explicit Contractual Agreement Under Section 9

April 21, 2025

Case Laws IBC AT

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