Section 10A bar on insolvency claims remains effective despite later acknowledgment; unagreed MSME interest cannot inflate the debt threshold.

Invoices issued within the Section 10A moratorium period under the Insolvency and Bankruptcy Code, 2016 remained statutorily barred from inclusion in the operational debt, and later acknowledgment of liability did not defeat that prohibition even where the account was described as running. Interest claimed under the MSME framework was also excluded because no agreement for interest was proved and no interest had been paid during the dealings, so it could not be added to cross the Section 9 threshold. The rejection of the insolvency application was therefore sustained.

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Issues: (i) Whether invoices falling within the Section 10A period of the Insolvency and Bankruptcy Code, 2016 could be excluded despite the existence of a running account and subsequent acknowledgment of debt. (ii) Whether interest claimed under the MSME framework could be added to the claim to cross the threshold for admission of the Section 9 application.

Issue (i): Whether invoices falling within the Section 10A period of the Insolvency and Bankruptcy Code, 2016 could be excluded despite the existence of a running account and subsequent acknowledgment of debt.

Analysis: The invoices falling within the protected period were held to be statutorily barred. Subsequent acknowledgment of the same debt did not remove the prohibition, because the legislative bar under Section 10A could not be defeated by characterising the account as a running account or by relying on later confirmation of liability.

Conclusion: The invoices covered by the Section 10A period were rightly excluded.

Issue (ii): Whether interest claimed under the MSME framework could be added to the claim to cross the threshold for admission of the Section 9 application.

Analysis: No agreement for payment of interest was proved, and no interest had been paid in the course of dealings. The claimed MSME interest was therefore not treated as part of the operational debt in the facts of the case and could not be used to inflate the claim amount for admission purposes.

Conclusion: The interest claim was not admissible for crossing the statutory threshold.

Final Conclusion: The rejection of the Section 9 application was sustained, and the appeal failed.

Ratio Decidendi: The statutory bar under Section 10A of the Insolvency and Bankruptcy Code, 2016 cannot be circumvented by subsequent acknowledgment of debt, and interest not contractually agreed cannot be added to the operational debt for determining maintainability.

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