Supreme Court Confirms 14.85% Interest Rate for Corporate Debtor's Debt; Re-verification Ordered, Plan Unaffected.

The SC upheld the NCLAT's decision fixing the interest rate at 14.85% per annum for the Corporate Debtor's debt to ARCIL. The Court directed the Resolution Professional to re-verify the claim at this rate and submit it to the CoC. The re-verification will not affect the Resolution Plan's implementation. Appellants may challenge the Resolution Plan's approval as per the law. Appeals and pending applications were disposed of. In a separate civil appeal, the Court dismissed the contempt petition and disposed of pending applications.

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Issues involved:
1. Quantification of principal amount and rate of interest determination in a case involving a Corporate Debtor and Asset Reconstruction Company.

Analysis:
The Supreme Court, comprising Hon'ble Mr. Justice Sanjiv Khanna and Hon'ble Mr. Justice Dipankar Datta, heard the matter related to Civil Appeal Nos. 1705-1707 of 2024. The Court allowed the intervention sought through I.A. no. 111767/2024. After considering the submissions from both parties, the Court decided not to interfere with the impugned judgment dated 21.11.2023 passed by the National Company Law Appellate Tribunal, which fixed the rate of interest at 14.85% per annum. The Court noted that this determination was made after considering various facts and taking a holistic view.

Regarding the quantification of the principal amount, the Court referred to specific paragraphs of the impugned judgment. The Court highlighted that the debt owed to the Corporate Debtor needed to be determined, which was to be reflected in the aggregate of claims admitted by the Resolution Professional in accordance with the Insolvency and Bankruptcy Code and the CIRP Regulations, 2016. The Resolution Professional had admitted the claim based on a rate of interest of 22%. The Court directed the Resolution Professional to re-verify the claim of the Asset Reconstruction Company (India) Limited (ARCIL) at a rate of interest of 14.85% within two weeks and submit it to the Committee of Creditors (CoC) and the Successful Resolution Applicant for further action.

The Court clarified that the re-working/verification as per the impugned judgment would not impact the Resolution Plan or its implementation. It could lead to the re-determination of the amount payable among similar class of creditors. However, the appellants were given the liberty to challenge the approval of the Resolution Plan and raise any other issues before the appropriate authority as per the law. The appeals were disposed of accordingly, with pending applications also being disposed of.

In another matter related to Civil Appeal No. 2506 of 2024, the Court declined to interfere with the impugned judgment that disposed of the contempt petition. The Court dismissed the petition and disposed of any pending applications in this regard.

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