https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=766414 https://www.taxtmi.com/caselaws?id=766414 Maintainability of Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) - no interest had ever been paid by the CD to the OC nor the interest component was ever recorded in the books of accounts - HELD THAT:- There is no dispute to the fact that out of total amount of Rs. 6,13,48,161.98/- Rs. 4,97,22,461.16 was towards the principal amount and Rs. 1,16,25,700.82/- was the interest. It is also not in dispute that Respondent No. 2 has claimed the interest only on the basis of invoice in which it has been mentioned that in case of delay payment, interest will be charged @ 12% or as per the agreed terms whereas no other document has been placed on record, much less, any purchase order or the agreement between the parties which can reflect the terms and conditions of the interest - The ledger account of the CD also reflects that principal amount claimed by the OC has been shown as nil which means that the principal amount has already been paid and has been accepted as such by the OC as the principal amount has been received without any murmur, therefore, the Tribunal is not correct to hold that the amount paid by the CD to the OC of Rs. 4,97,22,461.16 was adjusted towards interest at the first instance by making reference to the decisions in the case of Asset Reconstruction Company India Limited [ 2022 (8) TMI 70 - SUPREME COURT] and BHEL [ 2012 (10) TMI 1016 - SUPREME COURT] . Whether the amount of Rs. 1,16,25,700.82/- can be claimed even as an interest by the OC only on the basis of the boilerplate provision in the invoice in the absence of any agreement between the parties towards for the payment of interest or anything which may reflect it by way of email or purchase order etc.? - HELD THAT:- In the case of Prashat Agarwal (Supra) it was a condition in the invoice that interest will be charged @ 18% plus GST P.A after due date of the bill and the dispute was regarding the maintainability of the application filed under Section 9 in which the amount in question was less than Rs. 1 Cr. which is the minimum threshold prescribed under Section 4. In the present case, condition prescribed in the invoice is that in case of delay in payment, interest will be charged at the rate of 12 @ as per the agreed terms. This clause in the invoice is totally vague because it does not specify the period within which the amount was to be paid unlike the case of Prashat Agarwal [ 2022 (7) TMI 835 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH] in which it was prescribed that interest will be charged after due date of bill. Secondly, it is mentioned in this clause that interest will be charged as per the agreed terms whereas no agreed terms have seen the light of the day to enable the OC to claim interest as a part of debt. In this regard, the observation has been made, in the case of Comet Performance [ 2025 (1) TMI 793 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI - LB] by a three members bench of this Court, relying upon Rishabh Infra Through Hari Mohan Gupta Vs. Sadbhav Engineering Ltd., [ 2024 (11) TMI 1411 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] in which it has been held that invoices with interest clauses which were not part of the formal agreement are unenforceable . Conclusion - i) Interest claims based solely on invoice provisions without a formal agreement or acknowledgment are not enforceable under the IBC. ii) The IBC is intended for the resolution of debts, not for the recovery of interest claims that lack a contractual basis. The impugned order is set aside - the present appeal is allowed. Case-Laws IBC Wed, 19 Feb 2025 00:00:00 +0530