2026 (2) TMI 788 - AT - IBC

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 ... Applicability of Section 10A of the Insolvency and Bankruptcy Code - maintainability of company petition based on threshold amount - recoverability of contractual interest in insolvency proceedings - evidential value of invoices, purchase orders and ledger entries - HELD THAT:- A bare perusal of Part IV of the Insolvency Petition would show an amount of Rs. 1,00,42,977/- was an amount claimed to be in default as on 29.12.2020 but the date of default on which the default had occurred is stated to be 19.04.2019, hence beyond the purview of Section 10A of the Code. We also are not inclined to accept the argument of the appellant that Invoice No.4-174 to 4-179 stood paid and bare perusal of ledger at page 70 of appeal paper book does not support the submission of the appellant. The amount of interest claimed came to be Rs. 37,16,274/- and, therefore, the outstanding amount was shown to be Rs. 1,37,59,251/- as on 29.12.2020 in Part IV. We have also gone through reply filed by the Respondent No.1 and the documents annexed viz invoices of the year 2019 from Pages No.105 till 209 as well as corresponding purchase orders from Pages No.20 to 104 and we find all such invoices have been duly signed on behalf of the Corporate Debtor/R-2 and as per invoices an interest @ 24% per annum was to be charged after the due date of the bill viz 60 days from the purchase order. The statement of account relied upon by Respondent No.1/the Operational Creditor is at Pages No.82 and 83 of the appeal paper book and the said statement duly reveals the date of invoices, invoices number, invoices amounts, due dates and the interest charged, as per the terms agreed between the parties per invoices and accompanying purchase order(s) and thus amount due came to be more than Rs. 1 crore at the time of filing the petition. Thus we do not find any illegality in the impugned order. The appeal has no merit and accordingly it is dismissed. 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.