TMI Blog2022 (2) TMI 936X X X X Extracts X X X X X X X X Extracts X X X X ..... the Corporate Debtor claimed waiver though it diverted the funds of the company to semi business and also other business of the Corporate Debtor which are carried on by various entities. By making such allegations, the issue of interest becomes a contentious one between the parties which cannot be adjudicated by this tribunal. The principle that the operational debt does not include interest and hence a petition for interest alone cannot either be filed or be pursued is well settled and is well within the spirit of the IBC. This application which is being pursued only for the interest part of the debt cannot be admitted. Moreover the object of IBC is to keep the companies as ongoing concerns. The facts of this case would reveal that after filing of the Application, the Respondent cleared the principal amount. The defence taken in the counter is that the amounts due to the Operational Creditor were agreed to be paid after the Corporate Debtor receives the amounts from the Government. There is no denial of the said fact in the rejoinder filed by the Operational Creditor. Even in the E-mail which is relied upon by the Operational Creditor it is mentioned that the principal amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which time no finding on the eligible rate of interest can be given. In the light of the above, the Operational Creditor is given liberty to claim interest if he is entitled for the same, before the appropriate forum. Petition dismissed. - CP (IB) No. 11/9/AMR/2021 - - - Dated:- 28-1-2022 - Telaprolu Rajani , J. ( Member ( J ) ) For the Appellant : N. P. Vijaykumar , Advocate For the Respondents : Shabber Ahmed , Advocate ORDER Telaprolu Rajani , J. ( Member ( J ) ) 1. This Application is filed by M/s. Poly Pipes India Private Limited( hereinafter referred to as Operational Creditor ) seeking this Tribunal to initiate Corporate Insolvency Resolution Process against M/s. Anantha Biotechnologies Allied Industries ( hereinafter referred to as Corporate Debtor ), as the Corporate Debtor allegedly committed default of the debt which is due to the Operational Creditor. 2. The facts as put forth in the Petition are that, the Operational Creditor has supplied polyvinyl chloride, allied KSR 67 and other substances to the Corporate Debtor from 24.02.2018 to 07.02.2019. The Corporate Debtor failed to pay the amount due towards the said supply by the Operation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the debt. The Counsel for the Corporate Debtor, by relying on several judgments contends that this Petition cannot be pursued merely for realising the interest part of the debt and that filing of such an application for realising the interest would amount to a malicious prosecution for which the Operational Creditor would be liable for punishment. 7. The counsel for the Operational Creditor on the other hand submits that the judgments relied upon by the Corporate Debtor are rendered on various set of facts which are not similar to the facts of this case and interest part of the debt in those cases was meagre when compared to the amount of interest which has accrued in this case. On that basis he contends that the filing of this application and pursuing the same for realising the interest would not amount to malicious prosecution. 8. From the arguments the only point that remains to be determined is: I. Whether the application can be pursued for the interest part of the debt. II. To what result. I. Whether the application can be pursued for the interest part of the debt. There is no denial of the fact that the principle amount was paid by the Corporate Debtor aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rightly contended by the Corporate Debtor's Counsel the dispute is under IBC and not Arbitration Act. Hence, the said judgment does not come to the help of the Operational Creditor. (2009) 3 SCC 527 between Vijay Industries Vs. Natl Technologies Limited. The judgment is rendered under the Companies Act 1956 in a petition filed for winding up on the ground of inability of the Company to pay its debt. Relying upon the judgment of the Orissa High Court in Krishna Chemical Vs. Orient Paper and Industries Limited (2005) 128 Comp Case 412 (ORI) wherein it was held that the interest amount as claimed by the Operational Creditor in the two cases against the company however may not be in accordance with the provisions of Section 4 5 of the Companies Act 1993 held that the fact that the exact amount of interest claimed by the Operational Creditor against the company is disputed can be no ground to dismiss the petition for winding up for non-payment of the interest so long as the liability to pay interest of the Company to the Operational Creditor exists under Section 4 5 of the Companies Act 1993 and admittedly such liability has not been discharged by the Company. The first differe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Insolvency) 883 of 2019 between SBF Pharma Vs. Gujarat Liqui Pharmacaps Pvt. Ltd. wherein the NCLAT considered Section 65 which is as under: 65. Fraudulent or malicious initiation of proceedings.-(1) If, any person initiates the insolvency resolution process or liquidation proceedings fraudulently or with malicious intent for any purpose other than for the resolution of insolvency, or liquidation, as the case may be, the Adjudicating Authority may impose upon a such person a penalty which shall not be less than one lakh rupees, but may extend to one crore rupees. (2) If, any person initiates voluntary liquidation proceedings with the intent to defraud any person, the Adjudicating Authority may impose upon such person a penalty which shall not be less than one lakh rupees but may extend to one crore rupees. It was held that in the said case the Respondent/Corporate Debtor is not insolvent and viable and feasible to pay the claim amount. Only for recovery of the interest the appellant is pursuing the Insolvency Resolution Process which is malicious intent for any purpose other than for the resolution of insolvency or liquidation. Whether this application is filed with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said case and the Corporate Debtor made payment of the principal amount and the outstanding amount was only the interest part of, the claim. Subsequently another demand notice was issued by which time the dispute relating to the payment of interest was existing. Hence, the Adjudicating Authority rejected the application by the impugned order therein. The NCLAT observed that there was a pre-existing dispute before issuance of the demand notice. Hence, the application is not maintainable for the interest part of the debt as it cannot be termed as an operational debt. In the Judgment of the Hon'ble Supreme Court reported in between AS Krishna Associates Private Limited Vs. BL Kashyap and Sons Ltd., the Supreme Court after examining the law on the subject, observed that the definition of operational debt has no provision for payment of interest since there are no such provisions to initiate CIRP on the ground of non-payment of interest on operational debt. The claim of interest when actual amount of claim as per invoices have already been paid cannot be a ground to trigger CIRP against the Corporate Debtors under the Code. It also observed that the case is not of a financial d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and acknowledged by the Corporate Debtor dated 28.09.2020 shows that it is an internal E-mail of the Operational Creditor's Company stating that there were discussions with one Mr. Anantha Reddy of the Corporate Debtor and points discussed were listed as four. The first is signed balance confirmation received for the principal amount. Second is the Repayment of principal amount, wherein it is stated that customer has confirmed that the principal amount shall be repaid immediately after receipt of payment from Government of Andhra Pradesh which is expected in three to four months. Third is for the interest for the delayed period till the date of repayment. It is mentioned that the customer has confirmed post settlement of principal outstanding, customer shall settle the interest amount and the customer has requested for the rate reduction in interest percent which will be taken to the management of poly pipes and shall be decided after receipt of the principal outstanding and fourthly cheques wherein the customer has agreed to provide cheques within a week since the Authorized Signatory is out of station. This E-mail would only reflect that there were discussion between the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest amount would be taken to the management of the poly pipes and shall be decided after receipt of the principal outstanding. But the subsequent letter only mentions that the waiver of interest would not be considered since, the Corporate Debtor claimed waiver though it diverted the funds of the company to semi business and also other business of the Corporate Debtor which are carried on by various entities. By making such allegations, the issue of interest becomes a contentious one between the parties which cannot be adjudicated by this tribunal. The principle that the operational debt does not include interest and hence a petition for interest alone cannot either be filed or be pursued is well settled and is well within the spirit of the IBC. Hence, I opine that this application which is being pursued only for the interest part of the debt cannot be admitted. Moreover the object of IBC is to keep the companies as ongoing concerns. The facts of this case would reveal that after filing of the Application, the Respondent cleared the principal amount. The defence taken in the counter is that the amounts due to the Operational Creditor were agreed to be paid after the Corporate Debt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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