TMI Blog2019 (5) TMI 516X X X X Extracts X X X X X X X X Extracts X X X X ..... prayer for initiation of corporate insolvency resolution process against M/s. TBEA Green Energy (India) Private Ltd., under Section 9 of the Insolvency and Bankruptcy Code, 2016 [hereinafter referred to as the Code ]. 2. That, the applicant/operational creditor is a private limited company incorporated under the Companies Act, 1956, having identification number U51500MH2001PTC133917 and having its registered office at Suyog Industrial Estate, Vikhroli West, Mumbai 400 083, engaged in the business of carrying out single point turnkey solutions for customers requiring hearing systems such as boilers/heaters for process application which is used in manufacturing process. 3. That, the respondent/corporate debtor is a private limited company registered under the Companies Act, 1956, incorporated on 07.07.2010 at Delhi and subsequently shifted to Gujarat on 05.09.2012, having identification No. U40104GJ2010PTC071817 and having office at tbea Green Energy Park , Vill. Miyagam, Karjan, Dist. Vadodara 391 440, Gujarat State. Nominal share capital of the respondent company is 932,99,68,000/- and paid up share capital is ₹ 9,24,34,31,170/-. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st payment on 27th January, 2014 of ₹ 76,500/-, principal amount of ₹ 25,42,163.31 and interest thereon to the tune of ₹ 32,32,356/- remains outstanding as payable by the respondent company. That, despite repeated follow up calls over phone and assurance from respondent company, it failed to release outstanding payments even after acknowledgement and acceptance of outstanding debt. 7. It is further submitted by the learned counsel appearing on behalf of the applicant that on 20th October, 2017, applicant was compelled to issue demand notice under section 8 of Insolvency and Bankruptcy Code read with Rule 5 of the Insolvency and Bankruptcy Regulations, 2016 calling upon the respondent company to pay aggregate amount of ₹ 25,42,163/- with further running interest @ 24% per annum from the date of receipt of notice and till the actual payment and/or realisation, within ten days of the receipt of notice and filing of Form No. 5. That, the said notice was served upon the respondent on 23.10.2017. However, the respondent company had not bothered to reply the said notice. That only after receiving the notice under this Code, senior officials of the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the entire dues along with interest can be raised; forming both principal and interest representing damages for the delayed payments, being crystalized into a single due. 10. That, the applicant has placed reliance upon the decision of the Hon'ble Supreme Court in the case of Oil Natural Gas Commission v. M.C. Clelland Engineers S.A. [1999] 4 SCC 327 wherein the Apex Court has held that the interest claimed on delayed payment stood crystallized and has become the part of the principal at the time of filing the claim before any court. In addition, the Hon'ble Court amplified the point by including the amount of interest with claim that is to say interest on damages or compensation for delayed payment stood merged with that of the principal. 11. The applicant has further submitted that the applicant has claimed interest @ 24% on the delayed payment of the amount raised in the invoices from the respondent. That the applicant suffered many loses due to non-realisation of the payments of the invoices raised against the respondent, compelling the applicant to borrow money from banks and outside agencies to run its business at heavy rate of intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cified in the invoices because that very interest stood crystallized and became the part of the principal. That therefore, the respondent cannot separate the principal and interest and run away from his liability to pay the interest to the applicant. That it is now settled law that invoices are considered as contract and parties are bound by its terms and conditions of these invoices. That, therefore, once the respondent has admitted amounts due and payable to the applicant in the bills; he can't wash his hands from paying the amounts with interest stipulated in the invoices. 14. Further, it is submitted by the applicant that, on 20th October, 2017 applicant issued demand notice under Section 8 of Insolvency and Bankruptcy Code read with Rule 5 of the Insolvency and Bankruptcy Regulations, 2016 calling upon the respondent company to pay aggregate amount of ₹ 25,42,163/- (Rupees twenty-five lacs forty-two thousand one hundred sixty-three only) with further running interest @ 24% per annum from the date of receipt of notice and till the actual payment, within ten days of the receipt of the notice. That, total amount of debt including interest @ 24% per annum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty-seven thousand four hundred thirty-four only), therefore, total outstanding principal amount has been paid by the respondent. That, the tax invoices filed along with the application contains the clause of payment of 20% per annum towards interest in case the payment is not made within fifteen days, but in the present application the applicant has sought interest @ 24% p.a. That, the tax invoices do not bear the signature of the representative of the respondent company, therefore, the respondent is not liable to pay interest as per tax invoice (s). It is further submitted that there was no clause of payment of interest between the parties, therefore, the present application for recovery of interest portion is not maintainable and even otherwise also this Tribunal does not have authority to give interest to the operational creditor under the IB Code. 20. It is further submitted by the respondent that, the applicant had issued demand notice on 20.10.2017, thereafter applicant moved before this Tribunal, but before effective hearing of the matter, respondent had already made payment of principal amount of ₹ 22,57,434/- (Rupees twenty-two lacs fifty-seven thousan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 07.02.2014 Interest charged 24% p.a. Yearly interest Interest Total Interest 07.02.14 to 07.02.15 6,10,119.19 6,10,119.19 31,51,282.50 07.02.15 to 07.02.16 7,56,547.80 13,66,667.00 39,08,830.31 07.02.16 to 07.02.17 93,38,119.27 23,04,786.27 48,46,949.57 07.02.17 to 07.11.17 8,48,588.58 56,95,538.15 07.11.17 to 30.11.17 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt on the part of the respondent justifiably claimed the interest @ 24% on delayed payments is exorbitant and unreasonable, more so when such statement is not supported by any authentic documents. Further, when the respondent company had given sizable business and had released payment of around ₹ 2.00 crores during the period January 2012 to January 2014, levying 24% interest is unfair. At the same time argument of the respondent is that the tax invoices do not bear the signature of the representative of the respondent company, therefore, the respondent is not liable to pay interest as per tax invoice; there was no clause of payment of interest between the parties, therefore, the present application for recovery of interest portion is not maintainable. 24. We have gone through the facts of the case and heard submissions made by the parties and perused the relevant provisions and the records. At this juncture, it is pertinent to refer to sub-section (21) of Section 5 of Insolvency Bankruptcy Code, 2016 which reads as under: - Operational debt means a claim in respect of the provision of goods or service including employment or a debt in resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laims. If in terms of any agreement interest is payable to the operational or financial creditor, then debt will include interest, otherwise, the principal amount is to be treated as the debt which is the liability in respect of the claim which can be made from the corporate debtor . 5. In the present appeals, as we find that the principle amount has already been paid and as per agreement no interest was payable, the applications under Section 9 on the basis of claims for entitlement of interest, were not maintainable. If for delayed payment Appellant(s) claim any interest, it will be open to them to move before a court of competent jurisdiction, but initiation of Corporate Insolvency Resolution Process is not the answer . 27. In the instant appeal, admittedly, the principal amount has been paid before effective hearing of the petition. Especially when the applicant has not entered into any agreement regarding payment of interest, claim of the applicant for 24% interest per annum does not hold valid ground to file the instant application. 28. By following the above stated judicial precedents, we are of the considered view that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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