Inclusion of contractual interest determines maintainability where invoice terms and date of default support computing outstanding.

Determination focused on whether Section 10A barred the petition and whether the outstanding fell below the statutory threshold at filing. The tribunal found the recorded date of default predated the temporal scope relied upon, so Section 10A did not apply. Documentary invoices and signed purchase orders evidenced an agreement for interest after the credit period; interest was lawfully computed under those terms and included in the outstanding, which exceeded the threshold despite a pre-demand payment. Result: the petition was maintainable and the appeal against maintainability was dismissed.

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Issues: (i) Whether Section 10A of the Insolvency and Bankruptcy Code is attracted in the present case; (ii) Whether the outstanding amount at the time of filing of the company petition was below the statutory threshold (Rs. 1 crore) because of prior payment and absence of agreement to pay interest, rendering the petition not maintainable.

Issue (i): Whether Section 10A of the Insolvency and Bankruptcy Code applies to the petition filed in CP(IB) No.69 of 2021.

Analysis: The Court examined the date of default recorded in Part IV of the petition and the dates relied upon by the appellant. The petition records the date of default as 19.04.2019 while the default claimed as on 29.12.2020 includes interest computed thereafter. Section 10A is concerned with defaults occurring within the prescribed period; since the date of default falls beyond the temporal scope relied upon by the appellant, Section 10A cannot be invoked to bar the petition. The Court also considered the invoiced terms which provided for interest after a 60-day credit period and evidence showing acceptance of invoices and purchase orders signed on behalf of the corporate debtor.

Conclusion: Section 10A of the Insolvency and Bankruptcy Code is not attracted; conclusion is against the appellant.

Issue (ii): Whether the principal outstanding was below Rs. 1 crore at the time of filing because (a) a payment of Rs. 3,03,963/- was made prior to service of the demand notice and (b) there was no agreement for payment of interest, so interest could not be included to reach the threshold.

Analysis: The Court reviewed Part IV of the petition, the ledger, invoices, purchase orders and the reply to the demand notice. The Court found invoices and corresponding purchase orders bearing signatures on behalf of the corporate debtor and invoice terms providing for interest at 24% per annum after the agreed credit period. The ledger and supporting documents filed by the respondent show computation of interest in accordance with the invoiced terms, resulting in the claimed outstanding exceeding Rs. 1 crore on 29.12.2020. The Court did not accept the appellant's contention that specific invoices were paid or that interest was never agreed; documentary records did not support the appellant's assertion that the principal alone was below the threshold at filing.

Conclusion: The claim that the outstanding principal was below Rs. 1 crore is rejected; conclusion is against the appellant and in favour of the respondent.

Final Conclusion: The impugned order dismissing objections to maintainability is upheld; the appeal is dismissed and the company petition was correctly treated as maintainable because the outstanding, including interest as per agreed invoice terms, exceeded the statutory threshold at the relevant time.

Ratio Decidendi: Where invoices and accompanying purchase orders establish agreed terms for interest and the date of default predates any statutory cutoff relied upon by the appellant, interest properly computed under those terms may be included in determining the outstanding for assessing maintainability of a company petition under the Code.

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