Unilateral invoice-based interest claims cannot by themselves trigger CIRP under Section 9 IBC without contractual support.

Interest claimed solely on the basis of unilateral invoices could not sustain a Section 9 IBC application where the supply agreement contained no contractual interest clause, the invoices were not shown to have been accepted by the corporate debtor, and the principal debt had already been paid after reconciliation. A disputed interest component, without mutual consent or established conduct creating a binding obligation, cannot be treated as an operational debt to trigger CIRP. The reasoning also reaffirmed that the IBC is not a debt recovery mechanism, and that reliance on MSME law or the Interest Act was outside the proper forum for deciding maintainability in these proceedings.

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Issues: Whether interest claimed only on the basis of unilateral invoices, in the absence of any contractual interest clause in the supply agreement and after payment of the principal amount, could sustain a Section 9 application under the Insolvency and Bankruptcy Code, 2016.

Analysis: The parties' supply agreement governed the commercial relationship and its payment terms did not provide for interest on delayed payment. The invoices relied upon by the operational creditor were unilateral documents and were not shown to have been accepted by the corporate debtor so as to create a binding obligation to pay interest. Invoices may evidence a debt, but where the written contract is silent on interest, a claimed interest component can be enforced only if mutual consent or established conduct shows that the parties treated it as part of their bargain. The principal amount having already been paid after reconciliation, what remained was a disputed interest claim alone. The Tribunal held that such a contested and unsubstantiated interest claim cannot be used to enlarge operational debt for the purpose of forcing CIRP, and that IBC is not a debt recovery mechanism. The reliance on MSME law and the Interest Act was held to be outside the proper forum for determination in these proceedings.

Conclusion: The Section 9 petition was not maintainable on the basis of interest alone, and the dismissal of the insolvency application was upheld.

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