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Printing of the condition of interest without any consequential claim in case of delay while making follow-up for the payments cannot support the contention of interest claim – North Agro Industries Pvt. Ltd. Vs. Mahindra and Mahindra Ltd. – NCLT Mumbai Bench

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NCLT Mumbai Bench held that:
(i) If the Operational Creditor had not notified to the Corporate Debtor at the time of supply of goods or prior to it that it is registered under MSME Act, the Corporate Debtor cannot be fastened with obligation to make payments in accordance with MSME Act, and consequently cannot be made liable to pay interest @ 3 times of RBI lending rate as claimed by the Applicant.
(ii) As regards contentions of the Applicant that the invoices contained the stipulation of interest @24% p.a., this Bench finds that the Applicant has neither intimated about the levy of interest consequent to delayed payments nor raised any debit note.
(iii) There exists prior dispute in relation to deficiency in the goods and claim of benefit under MSME Act.
(iv) IBC proceedings cannot be used for recovery proceedings or for tangential goals. The intention of the legislation was never to allow this form of abuse of the IBC by extortionists such as the Applicant to harass and intimidate legitimate corporates such as the Corporate Debtor.

Printing of the condition of interest without any consequential claim in case of delay while making follow-up for the payments cannot support the contention of interest claim – North Agro Industries Pvt. Ltd. Vs. Mahindra and Mahindra Ltd. – NCLT Mumbai Bench Read Post »

Judgment in Mr. M. Ravindranath Reddy as well as judgment in Promila Taneja’s case does not lay down the correct law on categorisation of License Fee under Operational Debt in IBC. The claim of Licensor for payment of license fee for use of Demised Premises for business purposes is an Operational Debt within the meaning of Section 5(21) of the IBC – Jaipur Trade Expocentre Pvt. Ltd. Vs. M/s Metro Jet Airways Training Pvt. Ltd. – NCLAT New Delhi

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NCLAT held that both in Mr. M. Ravindranath Reddy and Promila Taneja this Tribunal did not dwell upon the correct meaning of expression ‘service’ used in Section 5(21) of the Code. More so, even if an expression is not defined in the statute, the meaning of expression in general parlance has to be considered for finding out the meaning and purpose of expression. The judgment of this Tribunal in Mr. M. Ravindranath Reddy’s case does not consider the extent and expanse of the expression ‘service’ used in Section 5(21) of the Code. Essential goods and services are entirely different concept and the protection under Section 14(2) as provided for is an entirely different context. Thus, the observations made that there has to be nexus to the direct input or output produced or supplied by the Corporate Debtor, is a much wider observation not supported by scheme of the Code. We having held that judgment of Mr. M. Ravindranath Reddy’s case does not lay down correct law, the judgment in Promila Taneja’s case can also not be followed.

Judgment in Mr. M. Ravindranath Reddy as well as judgment in Promila Taneja’s case does not lay down the correct law on categorisation of License Fee under Operational Debt in IBC. The claim of Licensor for payment of license fee for use of Demised Premises for business purposes is an Operational Debt within the meaning of Section 5(21) of the IBC – Jaipur Trade Expocentre Pvt. Ltd. Vs. M/s Metro Jet Airways Training Pvt. Ltd. – NCLAT New Delhi Read Post »

Devas deserves to be wound up on the grounds of Section 271(c) of the Companies Act, 2013 – Devas Multimedia Pvt. Ltd. Vs. Antrix Corporation Ltd. – NCLAT Chennai

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Devas deserves to be wound up on the grounds of Section 271(c) of the Companies Act, 2013 – Devas Multimedia Pvt. Ltd. Vs. Antrix Corporation Ltd. – NCLAT Chennai Read Post »

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