Insolvency threshold for operational debt requires consistent interest computation; creditor cannot alter claimed rate to invoke Section 9.

Operational debt for a Section 9 insolvency application must satisfy the statutory minimum under Section 4 of the Insolvency and Bankruptcy Code, 2016. Where the creditor had earlier pleaded in a civil suit that, after crediting part payment, the balance due was calculated with interest at 18% per annum, the creditor could not later rework interest at 24% per annum to cross the insolvency threshold. On the computation accepted on the creditor's own case, the debt remained below the prescribed minimum, so the Section 9 application was not maintainable and the admission order was set aside.

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Issues: Whether the operational debt, after giving credit to part payments and applying the interest rate actually claimed and awarded in the civil suit, satisfied the statutory threshold under Section 4 of the Insolvency and Bankruptcy Code, 2016 so as to make the application under Section 9 maintainable.

Analysis: The operational creditor had earlier asserted in the civil suit that after crediting part payment of Rs. 34,00,000/-, the balance due was Rs. 61,18,217/-, comprising principal and interest calculated at 18% per annum, and the civil court had granted interest at that rate. On that basis, the creditor could not later insist on calculating interest at 24% per annum for the purpose of crossing the insolvency threshold. The computation placed by the appellant showed that the amount remained below the statutory minimum prescribed for initiation of proceedings under Section 9.

Conclusion: The Section 9 application was not maintainable because the operational debt did not meet the threshold under Section 4 of the Insolvency and Bankruptcy Code, 2016, and the impugned admission order was set aside in favour of the appellant.

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