Operational Creditor's Petition Dismissed: Debt Paid in Full, Interest Claim Lacks Proof

The Tribunal dismissed the Operational Creditor's petition under section 9 of the Insolvency and Bankruptcy Code, 2016, as the Corporate Debtor paid the total outstanding debt before admission of the application and the claim for interest lacked documentary proof.

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Issues:
1. Petition filed by Operational Creditor under section 9 of Insolvency and Bankruptcy Code, 2016 for unpaid amount.
2. Dispute over payment between Operational Creditor and Corporate Debtor.
3. Claim of interest by Operational Creditor after payment made by Corporate Debtor.

Analysis:
1. The petition was filed by the Operational Creditor, claiming an amount due of Rs. 24,42,203 plus interest, under section 9 of the Insolvency and Bankruptcy Code, 2016. The Operational Creditor is engaged in supplying electrical goods, while the Corporate Debtor was selected for rural electrification works by another entity.
2. The Operational Creditor supplied material worth Rs. 31,21,883 to the Corporate Debtor, who made a partial payment of Rs. 6,79,680 but failed to pay the remaining amount. The Corporate Debtor contended that the demand notice issued was premature as the credit period had not expired. However, the Corporate Debtor eventually paid the entire outstanding debt through RTGS and cheques.
3. The Operational Creditor claimed interest on the outstanding amount, even after confirmation of payment by both parties. The Corporate Debtor argued that there was no clause regarding interest in the purchase order or invoice. The Tribunal found that the invoices did not contain any clause levying interest, and the purchase order did not specify the rate of interest.
4. Referring to previous judgments, the Tribunal observed that in cases where the total debt has been paid before admission of the application under the Insolvency and Bankruptcy Code, pursuing the application solely for interest is against the principles of the Code. As the Corporate Debtor paid the outstanding amount and could not substantiate the claim of interest with documentary proof, the application was dismissed.

Conclusion:
The Tribunal dismissed the application, as the Corporate Debtor had paid the total debt before admission of the application under the Insolvency and Bankruptcy Code, and the claim for interest was not substantiated with documentary proof.

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