Invoice-based interest cannot be added to operational debt without contract or mutual practice, leaving the insolvency filing below threshold.

Interest stated only in invoices, without a supporting contract or proven prior practice between the parties, cannot be treated as part of operational debt under the Insolvency and Bankruptcy Code. A unilateral invoice clause does not establish mutual consent, and the absence of earlier interest payments or conduct accepting such a term prevents its inclusion in the debt calculation. As a result, the claimed interest could not be added to the principal amount for meeting the statutory minimum required for a Section 9 application, and the insolvency application was not maintainable below that threshold.

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Issues: Whether interest mentioned only in invoices, without a contractual agreement or established past practice, could be included in operational debt for the purpose of meeting the statutory threshold under the Insolvency and Bankruptcy Code, 2016.

Analysis: The invoices contained an interest clause, but no formal agreement between the parties provided for levy of interest on delayed payment. There was also no evidence that interest had ever been paid earlier in the course of dealings. The Appellant failed to show mutual consent or conduct from which acceptance of the interest term could be inferred. In these circumstances, a unilateral stipulation in invoices could not override the absence of an agreed contractual term. The interest claim was therefore not part of enforceable operational debt for computing the minimum default amount required for a Section 9 application. The dispute over interest was also not one capable of being finally resolved in summary insolvency proceedings.

Conclusion: Interest claimed only through invoices, without a supporting agreement or proven mutual practice, could not be added to the principal amount for determining the threshold under the Code. The Section 9 application was below the statutory minimum and was not maintainable.

Ratio Decidendi: Interest can form part of operational debt only when it is contractually agreed or otherwise shown by mutual conduct and practice; a unilateral invoice stipulation of interest, standing alone, cannot be included to satisfy the Section 4 threshold for a Section 9 insolvency .

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