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NCLAT determined that interest claims of Rs. 1,16,25,700.82 based solely on invoice provisions were not enforceable under IBC without formal agreement. The principal amount of Rs. 4,97,22,461.16 had already been settled by the Corporate Debtor. The Tribunal erred in applying Asset Reconstruction and BHEL precedents regarding interest adjustment. The invoice clause stating "interest will be charged @ 12% or as per agreed terms" was deemed vague without specified payment terms or underlying agreement. Following Comet Performance and Rishabh Infra precedents, NCLAT held that invoice interest clauses not part of formal agreements are unenforceable under IBC. The appeal was allowed and impugned order set aside, reinforcing that IBC's purpose is debt resolution, not recovery of unsupported interest claims.
NCLAT determined that interest claims of Rs. 1,16,25,700.82 based solely on invoice provisions were not enforceable under IBC without formal agreement. The principal amount of Rs. 4,97,22,461.16 had already been settled by the Corporate Debtor. The Tribunal erred in applying Asset Reconstruction and BHEL precedents regarding interest adjustment. The invoice clause stating "interest will be charged @ 12% or as per agreed terms" was deemed vague without specified payment terms or underlying agreement. Following Comet Performance and Rishabh Infra precedents, NCLAT held that invoice interest clauses not part of formal agreements are unenforceable under IBC. The appeal was allowed and impugned order set aside, reinforcing that IBC's purpose is debt resolution, not recovery of unsupported interest claims.
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