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2018 (7) TMI 393 - AT - Insolvency and BankruptcyCorporate Insolvency Resolution Process - claim to the extent of principal amount barred by limitation - Held that:- As per Annexure II (I) and (Annexure-II)(5), the respondent admits its liability limiting to the principal amount. Thus, it appears to us that the claim to the extent of principal amount is not barred by limitation as alleged by the respondent. The contention of the respondent that the claim of the applicant is barred by limitation is therefore found not sustainable under law. Whether the claim of compound interest with monthly rest at three times of the bank rate notified by the Reserve Bank as per section 16 read with section 15 of the MSMED Act,2006 is liable to pay by the respondent? - Held that:- The total amount here in this case demanded by the applicant is ₹ 4,50,75,953.08 (Rupees Four Crores Fifty Lakh Seventy Five Thousand Nine Hundred Fifty Three and Eight Paise only). The liability to pay the amount as claimed by the applicant is in dispute by the respondents. So also application of SSI Act and MSMED Act in respect of calculation of the interest claimed by the applicant is also seriously in dispute in the case in hand. The principal amount due is only ₹ 22,74,897.65. The amount of interest claimed comes to ₹ 4,28,01,055.43 (Four Crore twenty-eight lakh one thousand fifty-five and paise forty-three only) as per the calculation of the operational creditor and he calculated the interest at the prevailing rate charged by the State Bank of India which includes compound interest and penal interest. Admittedly, there is no contractual liability to pay interest by the corporate debtor. If it is allowed it amounts to allowing interest more than 18 multiple of the principal amount which according to us is substantially unfair. No hesitation in coming to a conclusion that the dispute raised by the Corporate Debtor/Respondent is bona fide and it requires further investigation. Moreover, it appears to us that the claim for interest which is exceeding more than 18 times of the principal amount cannot be claimed by the applicant as a legitimate claim as against a corporate debtor in a proceedings of this nature, especially, from a Central Government undertaking who is willing to settle the applicant’s claims without interest. It is significant to note here that all the financial creditors’ claim was settled by the respondent upon wavier of claim of interest but the applicant, despite notice, not submitted its claim before the respondent but filed the application before this Tribunal. In the light of above-said discussion, this application is liable to be rejected.
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