Interest claim in insolvency requires contractual proof; balance-sheet entries alone cannot establish entitlement to interest.

A financial creditor claiming interest on an unsecured loan in insolvency proceedings must substantiate that entitlement with contractual or documentary evidence; balance-sheet entries alone do not establish a right to interest. A board resolution concerning another promoter's separate claim could not support the appellants' request, because claim collation is an administrative exercise based on material placed before the resolution professional. On that basis, the claim was admitted only to the principal amount and the challenge to rejection of the interest component was not interfered with.

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Issues: Whether the appellants were entitled to admission of the interest component on their unsecured loan claims despite the absence of contractual or documentary proof, and whether rejection of the application by the adjudicating authority was liable to be interfered with.

Analysis: The claim was admitted only to the principal amount because no agreement, resolution, or other cogent material established an entitlement to interest at 18% or at any rate. The balance-sheet entries relied upon by the appellants did not by themselves prove a contractual right to interest. The existence of a board resolution granting 15% interest to another promoter did not assist the appellants, since that admission was based on a separate record and was not the subject of the application. In claim collation, the resolution professional performs an administrative function and must act on the material placed before it. The statutory requirement of substantiating a financial claim with evidence under the insolvency framework was not met.

Conclusion: The rejection of the request to include the interest component was and the challenge to that rejection failed; the claim remained admissible only for the principal amount.

Final Conclusion: The appeals did not warrant interference and the order rejecting the applications was sustained.

Ratio Decidendi: A financial creditor seeking admission of interest in insolvency proceedings must establish a contractual or documentary basis for that entitlement; balance-sheet entries or comparative treatment of another creditor do not, by themselves, prove such a claim.

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