Appeal allowed, Section 9 application closed; interest claim rejected. Adjudicating Authority's directive deemed erroneous.

The appeal was allowed, and the Section 9 application was closed as the debt claimed had been paid in full by the Appellant. The Tribunal determined that the claim for interest on Safeguard Duty could not be included in the operational debt under Section 9. The Adjudicating Authority's decision to direct the parties to settle the matter amicably after the debt was paid was deemed erroneous. The Operational Creditor was permitted to pursue legal action for the interest liability separately.

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Issues Involved:
1. Payment of Safeguard Duty and GST
2. Claim for Interest on Safeguard Duty
3. Jurisdiction and Decision of Adjudicating Authority

Summary:

1. Payment of Safeguard Duty and GST:
The Respondent, Mahindra Susten Pvt. Ltd., filed an application under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, claiming an amount of Rs. 17,24,06,024.33 from the Appellant, Hindustan Zinc Ltd., for Safeguard Duty and GST. The Adjudicating Authority noted that the Appellant had paid the entire claim amount of Rs. 16,41,96,213.38 (principal amount) and applicable GST totaling Rs. 18,68,55,290.82 on 14.11.2022. Consequently, the debt as claimed in the application stood paid.

2. Claim for Interest on Safeguard Duty:
The Operational Creditor argued that the interest amount on the Safeguard Duty was yet to be paid by the Corporate Debtor, amounting to Rs. 10,59,37,689/-. The Adjudicating Authority observed that the claim of interest was not included in the original Section 9 application as the interest amount was crystallized only after the provisional assessment was finalized by the Customs Department on 04.10.2022. The Tribunal held that the claim of interest could not be included in the operational debt as claimed in the application under Section 9.

3. Jurisdiction and Decision of Adjudicating Authority:
The Appellant contended that the Adjudicating Authority erred in refusing to reject the Section 9 application after the debt was paid and instead directed the parties to settle the matter amicably. The Tribunal held that the Section 9 application should have been closed as the entire operational debt was paid. The Tribunal allowed the appeal, closing the application under Section 9 filed by the Operational Creditor. However, it noted that the Operational Creditor could take legal proceedings against the Corporate Debtor if the liability of interest was not discharged.

Conclusion:
The appeal was allowed, and the Section 9 application was closed. The Tribunal clarified that the Operational Creditor could pursue legal action for the interest liability, and the Appellant could challenge the levy of interest through appropriate legal proceedings.

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