Company Appeal (AT) (Insolvency) No. 1014 of 2019

Decided On: 11.02.2020

Appellants: Steel India
Respondent: Theme Developers Pvt. Ltd.

Hon'ble Judges/Coram:
Venugopal M., J. (Member (J)), Kanthi Narahari and V.P. Singh


V.P. Singh, Member (T)

1. This appeal emanates from the order passed by the Adjudicating Authority on the application filed U/s. 9 of the Insolvency and Bankruptcy Code 2016 (for short I & B Code') by the Appellant/applicant M/s. Steel India to initiate Corporate Insolvency Resolution Process (CIRP) against the corporate debtor M/s. Theme Developers Pvt. Ltd. The appellant contends that the 'Corporate Debtor' committed default in making payment to the extent of Rs. 22,64,054/-, which is inclusive of interest calculated @ 2% on the delayed payments against goods sold and delivered by the 'Operational Creditor' to the 'Corporate Debtor'. The Applicant states that it supplied the steel bars to the 'Corporate Debtor' for their construction activity, at their project sites and against these supplies various invoices have been raised. Details of invoices are given below:

2. It is further stated by the 'Operational Creditor' that as per the terms and conditions between the parties; it was aggrieved that in case the payment is delayed beyond 60 (sixty) days, 2% interest per month will be charged.

3. The Appellant/Operational Creditor further contends that amount due towards the 'Corporate Debtor' is of interest amounting to Rs. 22,64,054/-., for delayed payment against the goods sold and delivered. The details of computation of outstanding amount, relating to the payment of interest for delayed payment is Rs. 22,64,054/-, which is due and payable, against the 'Corporate Debtor'.

4. The Adjudicating Authority rejected the petition, on the ground that outstanding amount is relating to the payment of interest-only, on account of the delayed payment, to the extent of Rs. 22,64,054/-, i.e. for the period from 2015 to 2018.

5. The Adjudicating Authority rejected the petition, also on the ground that the 'Corporate Debtor' has raised the dispute on 10th January 2019, after receiving the first demand notice, stating that they are not liable to pay the amount, as claimed by the 'Operational Creditor'. The demand notice has been issued on 15th January 2019. The petition was rejected, on the ground of pre-existing dispute, covered under Section 5 sub Clause 6(a) of the I & B Code 2016.

6. The Learned Counsel for the Respondent, corporate debtor submits that the 'Operational Creditor' has filed the Application under Section 9 of the I & B Code, before the Adjudicating Authority, alleging its dues towards interest on loan alone, which is not maintainable, given the decision of this Appellate Tribunal in the cases of SBF Pharma V Gujarat Pharma caps Pvt. Ltd., Company Appeal (AT) (Insolvency) No. 883 of 2019 and Company Appeal (AT) (Insolvency) No. 1227 of 2019 in S.S. Polymers Versus Kanodia Technoplast Limited.

7. The Respondent/Corporate Debtor contends that interest alone on loan does not qualify the term 'Operational Debt', as defined under the 'I & B Code' 2016. The Respondent further submits that the Appellant has suppressed the fact that before issuance of demand notice dated 13th January 2019, it had issued the purported demand notice DT. 28th December 2018 under the 'I & B Code' 2016, in Form-3 claiming a sum of Rs. 36,00,006/-, which includes the principal amount Rs. 13,35,952/- and interest to the tune of Rs. 22,64,054/-. In response to the first demand notice dated 28th December 2019 the 'Corporate Debtor' made the payment of the principal amount of Rs. 13,35,952/- via RTGS on 28th January 2019 and raised the dispute regarding the outstanding interest amount, i.e. Rs. 22,64,054/- towards interest dues. The Respondent further submits that before the issuance of demand notice under Section 8 of the I & B Code, the 'Corporate Debtor' has raised the dispute about the outstanding interest, i.e. Rs. 22,64,054/-, which is purported to b........