TaxTMI 
TaxTMI 
2022 (1) TMI 715
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....ing Company was engaged by the Respondent Company - Corporate Debtor for the advertisement related work. The payments were made from time to time regarding the work undertaken by the Appellant. (ii) The Appellant on 27th July, 2018 sent a Demand Notice under Section 8 of the Code demanding payment in respect of unpaid operational debt due from the Respondent demanding an amount of Rs. 89,28,494/- including interest. The Respondent Company replied vide its email dated 27th August 2018 refuting the claim of the Appellant and stated that no amount is due and payable by the Respondent Company. (iii) On 13.12.2018, the Appellant filed an Application under Section 9 of the Code where Rs. 18,09,586/- was claimed as principal amount and Rs. 71,18,908/- was claimed as interest @ 3% monthly, totaling Rs. 89,28,494/-. (iv) The Respondent on 15.12.2018 made payment of Rs. 18,07,373 through NEFT to the Appellant. (v) The Adjudicating Authority vide order dated 16.01.2019 issued notice to the Respondent Company in Section 9 Application. (vi) The Respondent Company filed reply dated 15th February, 2019 to Section 9 Application disputing any liability to pay. In the reply, it was specifi....
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....have been proceeded any further and no error has been committed by the Adjudicating Authority in rejecting the Application. It is submitted that there was no agreement for payment of any interest and different rate of interest is being claimed by the Appellant, which is apparent from materials filed by the Appellant itself. 5. We have considered the submissions of the learned Counsel for the parties and have perused the record. 6. There is no dispute that before issuance of notice in the Company Petition filed by the Appellant, the principal amount as claimed by the Appellant of Rs. 18,07,373/- was paid on 15th December, 2018. The claim of interest was refuted in the reply filed before the Adjudicating Authority by the Respondent. It was specifically a case of the Respondent that there was no agreement between the parties to make any payment of interest and the claim of interest by the Appellant is mala-fide and without any basis. 7. It will be useful to refer to the pleadings of Respondent in reply filed to Section 9 Application to find out the nature of dispute raised by the Respondent in its reply. Paragraph 5 of the reply is as follows: "5. That the afore-captioned applica....
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....me Court in (2018) 1 SCC 353 - Mobilox Innovations Private Limited vs. Kirusa Software Private Limited where in paragraph 51 of the judgment it was held that Adjudicating Authority has to see as to whether there is a plausible contention which requires further investigation and that the "dispute" is not a patently feeble legal argument or an assertion of fact unsupported by evidence. In paragraph 51 following was laid down: "51. It is clear, therefore, that once the operational creditor has filed an application, which is otherwise complete, the adjudicating authority must reject the application under Section 9(5)(2)(d) if notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility. It is clear that such notice must bring to the notice of the operational creditor the "existence" of a dispute or the fact that a suit or arbitration proceeding relating to a dispute is pending between the parties. Therefore, all that the adjudicating authority is to see at this stage is whether there is a plausible contention which requires further investigation and that the "dispute" is not a patently feeble legal argument or an assertion....
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.... while interpreting Section 433 (e) and (f) and Section 434(1) (a) and Section 439 of the Companies Act, 1956 has laid down that failure to pay the agreed/ statutory interest is covered under the word "debt". There can be no dispute to the proposition of law as laid down by the Apex Court in the above case. When an amount of interest is agreed or statutory, the same shall be clearly part of the debt. However, the judgment of Vijay Industries (supra) is clearly distinguishable from the facts of the present case, since in the above case the claim of interest was not disputed, which facts is reflected in paragraphs 30 and 31 of the judgment, which are to the following effect: "30. The fact that despite receipt of a legal notice dated 23-12-2003, no payment has been made to liquidate the debt on the part of the Company is not in dispute. Admittedly, the appellant had been supplying castor oil to the respondent. The fact that the respondent did not pay the price of the said supplies, on presentation of the invoices, is also not in dispute. It also stands admitted that the parties negotiated as regards the manner in which the payments could be made. In a meeting held on 25-11-2003, pro....
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....rest for some period @2.5% per month. There is no clarity even on the part of the Appellant as to what rate of interest is liable to be paid by the Respondent. The Appellant was only advertising agency and as per Invoices, the claim of interest @ 5% monthly comes to interest @ 60% per annum and @ 3% it comes to 36% per annum. The Adjudicating Authority after taking into consideration of all facts and circumstances has rightly in paragraph 9 has turned the claim of interest as unconscionable, irrational and unjustified. In paragraph 9 of the judgment of the Adjudicating Authority following has been observed: "9. In view of the above facts, this Bench is satisfied that as the principal amount has already been paid by the Corporate Debtor, the claim of the petitioner for Rs. 71,18,908.04 as interest is unconscionable, irrational, unjustified and in the opinion of this Bench does not qualify as a operational claim, default of which would entitle the petitioner to seek resolution of the Corporate Debtor. The claim for interest on delayed payment is a disputed fact by the Corporate Debtor and as such can only be adjudicated by a court of competent jurisdiction. Initiation of Corporate ....