Operational debt and interest claims cannot sustain a section 9 insolvency petition after principal payment is made.

A section 9 Insolvency and Bankruptcy Code petition cannot be maintained on interest alone once the principal operational debt has been discharged. The Tribunal noted that operational debt under section 5(21) does not treat interest in the same manner as financial debt, and the original invoices contained no agreed interest clause. Later invoices adding interest were unilateral and not shown to have been accepted by the respondent, and no contractual or statutory basis for the claimed rate was established. In these circumstances, the remaining interest dispute did not justify admission of the insolvency petition, which was rejected.

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Issues: Whether a petition under section 9 of the Insolvency and Bankruptcy Code, 2016 could be admitted when the principal amount had been paid and only the claim for interest remained in dispute.

Analysis: The petitioner's principal claim was satisfied by cheques issued by the respondent, and the remaining dispute concerned interest. The definition of "operational debt" under section 5(21) of the Insolvency and Bankruptcy Code, 2016 does not include interest as such in the manner of a financial debt. On the record, the invoices originally relied upon did not contain any agreed interest clause, and the later tax invoices containing an interest stipulation were unilateral and not shown to have been accepted by the respondent. The material also did not establish any contractual entitlement to the claimed rate of interest. In these circumstances, the Tribunal held that it was not intended under the Code for interest to be determined and awarded in the course of deciding a section 9 application as if it were a separate debt claim.

Conclusion: The section 9 petition was not maintainable on the basis of an interest claim alone and was rejected.

Final Conclusion: Once the admitted principal liability stood discharged, the remaining claim for interest did not justify admission of the insolvency petition under the Code.

Ratio Decidendi: A unilateral or unproven claim for interest, absent contractual acceptance or statutory basis, does not by itself constitute operational debt for admission of a section 9 insolvency petition after the principal debt has been paid.

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